Beatmaker for the iPhone
iPhone apps continue to evolve. I recently stumbled upon Beatmaker, a music creation tool on sale through the Apple store. It's a bit more expensive than the other apps (around £12 I think) and doesn't have midi support yet, but the demos I've seen so far have been extremely impressive.
Considering there's a solid business model in place for developers with the app store, I can't wait to see what others develop in the coming weeks and months. The iPhone really is a portable computer; not just a smartphone, and I think that'll become increasingly evident as time goes on.