Peter Kirn over at Create Digital Music has posted a great round-up of all the tools people have put together to make music with the iPod Touch and iPhone.
The post touches on some of the more technical aspects of music app development on the iPhone and iPod Touch, and there's a great list of links to cool apps you can download and mess around with.
Music apps are still in their infancy on the iPhone, but hopefully, as the SDK gets out there to more developers, we'll begin to see more robust and feature-heavy apps.
Me? I want to see Ableton Live on the iPhone.