Smule has Magic Guitar (iTunes Link) for the iPhone and iPod Touch in the iTunes App Store for FREE.

Get ready to rock! Unleash your inner rocker with Magic Guitar, and you’ll be shredding like a legend in no time. Simply hold your phone like a guitar neck, and beams of light help you play the greatest guitar songs your own way. You control the notes, speed, guitar type, pitch and vibrato. Play it once, play it a hundred times, each time is a unique experience that won’t get old.