I always amazes me what people can do with various music programs on the iPhone. To me, it would require some seriously heavy duty equipment to make a good synth beat, but I'm no music expert.
NanoSynth is the iPhone equivalent of the heavy duty equipment that I was talking about. Combining "sampling, synthesis, sequencing and mastering in a single application", NanoSynth just about does it all.
"Record your ideas in real time, mix synth layers with samples, compose and arrange your tune using the powerful sequencer and bring the mix alive with real time effects such as reverb, waveshaping and delay. You can use your own samples or record them using the microphone. NanoStudio's low latency audio engine is custom engineered for iPhone, capable of delivering an amazing 48 voice polyphony in CD quality stereo."
Check out the promo video that they made for the app and see its awesomeness for yourself. Enjoy!