Like I said, wild. That program is called the "Bacterial Orchestra -- Public Epidemic No. 1," and it sounds like the app will be available on the iPhone soon as well. Of course, you'll have to have a bunch of iPhones with the app in one place for it to work the way it's designed, but at least there's good video of it.
There's also good video of the iPhone OScestra, a group of musicians run by Smule's Ge Wang, who use apps like their Leaf Trombone and the Ocarina to churn out something an interesting composition, and who performed at London's Open Hack convention last week. I'm not sure whether it's just so much power in such a tiny machine or the innovative multitouch interface, but the iPhone is turning out to be quite an instrument, in many different ways.