Quote: "The game would also need Internet access to get more levels. Also, if it's running on an iPad or an iPhone they don't have sniffer software"
Uh, that's not true. Anyone could write such software on an unlocked iphone. I don't know how the iPhone emulator thing works, but if that can get connectivity, that can also be sniffed. Further, connecting via wifi, packets could be captured at or after the router.
Also, your executable could be dissassembled and reviewed.
I would suggest, use http authorization to a php script if you want to authorize users via internet. And, failing that, use a formula to calculate a serial.
Both will prevent trivially copying the game from one place to another, but neither would prevent a determined hacker. No method would prevent a determined hacker.