Various sources have had news about the iStylophone app from The Very Cool Software Company. It appears that the app should be released at the beginning of December for $5.95, which is cheaper than the real thing (although you need an iPhone first of course).
Also, the Very Cool Software Company says this about their forthcoming app:
The app is being developed entirely in conjunction with Brian Jarvis (the inventor of the Stylophone) and his son Ben Jarvis of Dübreq, it is indeed a faithful reproduction of the original with some cool bonus features (3 tones, bass, mid and treble and 3 different skins to match and a very special ‘Record’ function),
Finally, the Very Cool Software Company also plan to launch other music apps, but as yet no details.