The Tango Remote Music Player performs a neat trick and does it for free: it links any two iOS devices on a wireless network, allowing one to be a music source and the other to be a remote control.
To get going, Tango needs to be on both devices. One device is set to play its on-board music; the other device serves as the remote. In my case, I used my iPhone as a music source while it was plugged into some external speakers. My iPad discovered the iPhone, and I saw playlists, albums, and tracks. I could play anything I wanted from the iPad. Of course it also works the other way, and you can have an iPod touch substituting for the iPad or iPhone.
The only issue I had was that the two devices could not link if Bluetooth was activated. There is an on-screen note about this, so if Tango's not working, Bluetooth is the first thing you should check. Hopefully this isn't permanent -- I'd like to see the developers add Bluetooth linking between iOS devices, rather than requiring Wi-Fi. (Note: The developers says you can link with Bluetooth, something I didn't try. you just can't have WiFi and BT on at the same time and have the WiFi work.)
Tango may be a bit of a niche product because it solves a problem that only a few people might have, but it works well and does the job at no cost. Assuming you have multiple iOS devices, I would definitely give this app a go. It has some built-in help and doesn't require deep thought to get it up and running. Check the gallery to see what it looks like running on an iPhone.