I got to see the Trainz Simulator in action at GDC this year. The Trainz series of software is extremely popular on the PC, and the company released an iPad version a little while ago to pretty high acclaim. I will admit to knowing nearly nothing about trains, either the real or the miniature kind (though I did have a small set as a kid), but I have to say I was impressed by the variety of the options available on the iPad version -- you can create a full virtual train set, from locomotive to caboose and even the buildings and scenery around it, completely within the touch interface of the iPad.
It's pretty impressive. If you're not already schooled in the way of the model train, you might even be a little overwhelmed with all of the options available. But it is a fun way to play around with model trains without spending a ton of money on actual train items, and since the new version is coming out soon on the PC (Trainz 12 is due out in mid-April), the iPad version is on sale this weekend for just US$0.99. At that price, it's cheap enough to just download and see what you think of all the tools available for building up your own train set.