There was alot of buzz surrounding the "I am T Pain" autotune app last year, and meanwhile an even cooler app has slipped under the radar. ImproVox not only autotunes, but also adds harmonization in real time. There are different settings for voicings, major/minor, and effects. Best of all, you can record yourself and email your songs to friends. I've included a little holiday snippet from yours truly. Although you can use the mic that is built into the iPhone headset, I got better results using regular headphones and the built in mic mic that is used by the phone. If you have an iPad, you can use higher quality third party mics via the bluetooth connection kit.
In future versions I would like to see the ability to share the snippet directly to Facebook/Twitter, and Dropbox/Soundcloud integration.