Intua are planning on releasing a music making application for the iPhone and iPod Touch. It looks slick as would expect for anything Apple handheld related. Here is the feature list from the site:
16 triggerable pads with polyphonic control
Automatic sample slicing on multiple pads
Edit pads individually
Duration and tonal controls
Reverse
Gain
Output selection (Dry, FX Bus1, FX Bus 2)
Graphical sample bounds editorInstant muting
Muting individual pads makes your song breathingSample accurate Sequencer
Pattern step sequencer
Step velocity editor per pattern
Song pattern sequencer
On the fly live editing2 FX Busses, each rack containing
3 Band EQ
Synchronized Delay
Bit CrusherLive pattern recording
Record grooves from pads to sequencer patternsBrowser
Provided Sound Library
Multiple purposes instruments
Artist Kits
Local Library
Network share
Load and save samples, kits and projectsSong Export
Export your songs to commonly used sample formats
I am going to be a little skeptical until the “introducing” turns to “releases.” It has a lot of potential though. Some of the controls look a bit might be a little trick if you have fat calloused finger like myself. Imagine we will be seeing a lot more of this kind of stuff.

