I am just loving BeatMaker. BeatMaker is a music application for the iPhone that is similar to other loop creations applications like Reason. It is available at in the iTunes App Store. You can read more about it here: http://www.intua.net/products.html
BeatMaker is quite powerful. It comes with a number of professional sample kits and you can even create your own kits and transfer music to your OS X or Windows desktop via their free desktop app. The application includes drum pads for input of rhythms, visual sequencer and a wave editor. You can export music from your projects to wav files. The quality of the audio produced is as good as your kit samples. There is no reason that you could not create loops for professional use in recordings and live.
This app is well worth the $19.99 price tag.
My daughter (6 y/o) made the song below on BeatMaker. Check it out. I was amazed!