Gil Weinberg, Mark Godfrey and Andrew Beck won an award at ACM CHI 2010 for ZOOZbeat.
Their website reads:
ZooZBeat is a gesture-based musical studio, simple enough for non-musicians to immediately become musically expressive but rich enough for experienced musicians to push the envelope of mobile music creation. Start playing with just a click or select among background beats in a variety of styles. Use shake and tilt movements, tap the screen, or press the keypads to create and modify rhythmic and melodic lines. Based on years of research, our musical engine will interpret your actions into beautiful music that fits your style.
Download ZOOZbeat for free here
Learn more here
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Zoozbeat is an interesting iPhone app, if you like that you should also check out RJDJ as well which uses PureData to create reactive scenes on the iPhone.
Thanks for the reminder, I went to a RJDJ workshop at the Mobile Art&&Code event http://artandcode.ning.com/ last year, was great fun!