You shoud not care about the absolute value of the retain count. It is meaningless.
Said that, let's see what happens with this particular case. I slightly modified the code and used a temporary variable to hold the object returned by stringWithFormat
to make it clearer:
NSString *temp = [NSString stringWithFormat:@"http://%@", kTestingURL];
// stringWithFormat: returns an object you do not own, probably autoreleased
NSLog(@"%p retain count: %d", temp, [temp retainCount]);
// prints +1. Even if its autoreleased, its retain count won't be decreased
// until the autorelease pool is drained and when it reaches 0 it will be
// immediately deallocated so don't expect a retain count of 0 just because
// it's autoreleased.
NSString *serverUrl = [[NSString alloc] initWithString:temp];
// initWithString, as it turns out, returns a different object than the one
// that received the message, concretely it retains and returns its argument
// to exploit the fact that NSStrings are immutable.
NSLog(@"%p retain count: %d", serverUrl, [serverUrl retainCount]);
// prints +2. temp and serverUrl addresses are the same.