I've been messing with iOS music making since the iPhone came out, and recently have been doing ALL of my music making just on the iPad for a change. For me the real change that led me to feeling comfortable doing full songs was getting Auria, and the release of Audiobus.
Auria is the first DAW style app that works as I'd expect, and is actually fun to use on the iPad. Moving and resizing clips just by dragging your finger is actually a very natural way to arrange songs I find. And Audiobus lets me just jam away on all these fun synth apps, knowing i'm recording in Auria and can edit out the best bits later to use in a song. Just like I was doing on my desktop DAWs.
Prior to this I was mainly coming up simple grooves on my iOS app. Things like Figure, iKaossilaotr, Beatmaker2, and NanoStudio. Fun for quick ideas, but too tedious for me to really get into for doing complete songs.
Also, just recently picked up the QuNexus controller (see my review in the "Other GEar" forum here), which makes playing iOS synths WAY more fun. No denying the power and sound of these, but I never did get on with playing a glass keyboard. Now i can play notes on the QuNexus and adjust parameters on the iPad, which makes for a much more natural workflow.
These two tracks were done 100% from start to mastered finish on just the iPad:
http://tarekith.com/mp3s/Tarekith-Veloant.m4ahttp://tarekith.com/mp3s/Tarekith-TH1.m4aI'll have a third going up later today or tomorrow. Also, here's a link to my blog, where I talk a lot about using iOS apps for making music, what I like and don't like, etc:
http://tarekith.com/category/ios/Happy to answer any questions here too.