I just bought the crazy app for my iPhone by Brian Eno and Peter Chilvers
It creates, or allows you to create, ambient type music on your iPhone or iPod touch. It's well thought out and a blast to mess with. It's nice to see people creating instruments for a platform which don't attempt to emulate "real world" instruments. Hit the iTunes store to learn more.
Tape Op is a bi-monthly magazine devoted to the art of record making.