In this article, the author describes some of the challenges of iterative development from the perspective of the project manager and discusses the common "traps" and pitfalls.

The Rational Unified Process (RUP) advocates an iterative or spiral approach to the software development lifecycle, as this approach has again and again proven to be superior to the waterfall approach in many respects. But do not believe for one second that the many benefits an iterative lifecycle provides come for free.

Iterative development is not a magic wand that when waved solves all possible problems or difficulties in software development. Projects are not easier to set up, to plan, or to control just because they are iterative. The project manager will actually have a more challenging task, especially during his or her first iterative project, and most certainly during the early iterations of that project, when risks are high and early failure possible. 

Clidk on the link below to download the article.