I'd never gotten the opportunity to use Rogue Amoeba's Airfoil prior to today, and then I found out about Airfoil Speakers Touch (link opens iTunes). Airfoil allows you to stream audio from your Mac to other devices including Apple TV, Airport Express, other Macs on your network and now the iPhone and iPod touch. We looked at a similar application not too long ago, but the definite upside to Airfoil Speakers Touch is that you don't have to go through the mess of installing a separate server application -- especially if you already own Airfoil.
Using Airfoil Speakers Touch is extremely simple. I opened Airfoil on my Mac for the first time and it showed my laptop and Apple TV on my network. I then launched Airfoil Speakers Touch on my iPhone and it added the iPhone as an available streaming device. I selected iTunes as the source of my audio and clicked on the icon next to the iPhone on the Airfoil application. A quick restart of Airfoil (its Instant Hijack plug-in will bypass that) and I could stream music from iTunes through the iPhone. On the iPhone, a small image of my MacBook (complete with an image of my current desktop) appeared.
The application works beautifully. I left the laptop in my bedroom and carried my iPhone around both inside and outside of the apartment until I left the range of my wireless router. The sound is crystal clear and it turns the iPhone (and 2nd-gen iPod touch) into a great portable speaker.
However, there are a couple of drawbacks. If you exit the application on your iPhone, it will cut off the streaming. Because of this, there's no way to jump over to the Remote application and remotely control iTunes. So if you want to utilize your device as an Airfoil speaker, you need to have a playlist set up in advance since you can't change tracks from within the application itself. I'm hoping remote features will be added some time in the future. It would really make this a killer app.
Airfoil for the Mac is $25, and a free demo is available. It requires OS X 10.4 or above. Airfoil Speakers Touch is a free download through the iTunes App Store.