Apple's release of GarageBand for iPad has, in a small way, rocked my world. There have been a few admirable attempts at multi-track recorders, but this US$4.99 app from Apple takes the cake. The best part is that it's not just a musicians tool; anybody with half an ear for a tune can start composing great-sounding tracks from the moment they launch the app.
When I was a kid, I had a Tascam 4-track, an acoustic guitar and a general MIDI synth. I spent hours, even days, at a time playing with them. If I'd had this back then, I might never have left the house. With an array of built-in instruments and an eight-track recorder, you don't even need to plug anything in to start rocking. That's not to say you can't, I've had decent luck plugging in a Blue Snowball, a couple of M-Audio keyboards and my electric guitar via the iRig.
The "Smart" instruments included in GarageBand can build backing tracks in minutes, with a pretty good selection of pianos, organs, guitars (electric and acoustic), basses and drums. You can record in sections, pattern style, or you can record straight through. In section mode, most instruments will stop recording and start playback at the end of a section, but drums, handily enough, automatically overdub to let you build multiple layers of percussion with ease.