I picked up one of these from Professional Sound and Music here in San Diego to use with my iPhone 3GS for session recordings. I am very impressed both with the sound and build quality of the microphone.http://www.bluemic.com/mikeyforipod/
It has three gain level presets and the head pivots for a variety of usage scenarios. Also has a stereo line-in jack.
Apple changed the dock pinouts to remove the analog audio inputs on the latest iPhone 4, iPad, iPad 2, and generation 4 iPod Touch, so this microphone unfortunately won't work on those devices. It works perfectly with the older iPhone, iPhone 3G, and iPhone 3GS, as well as the generation 1-3 iPod Touch. Even works with the generation 1-4 iPod Nano as well the older hard disk based iPods.
The microphone MSRP is $79.00.
For recording software, I've been using iProRecorder by Bias ($0.99 on the iTunes App Store), quite pleased with the results:http://www.iprorecorder.com/