Griffin technologies just released a free iPhone App known as iTalk. I love Griffin Technologies. They have always stepped in and produced products that Apple had not yet gotten around to producing, and with the style befitting Cupertino chic.
A voice recorder to tape notes or anything else the mic will pick up. In typical Griffin style this is a simple straightforward delivery of a product. All controls are completely intuitive, no need to dig around in menus- everything you need is readily available. They've also produced another piece of software known as iTalk Sync for both the Mac and PC. The nice thing about the sync application is that you can easily download your recordings in AIFF format to your computer for further manipulation. A gigabyte will store 800 minutes if you have your recording quality set to Good, 400 minutes when set to Better, and 200 minutes when set to Best. It's free for now but does have ads from AdMob.