Note: I don't own an ipad, i just lust after all the cool music apps. I wish people would get started creating equivalent apps for android tabs (though i understand there were historical issues with the audio API in android, which i believe were rectified as of ICS)
(More details: http://www.guardian.co.uk/music/2010/dec/25/damon-albarn-fal...)
I believe the final mix was done elsewhere but it was largely written and performed on the iPad.
Musicians use the iPad in all kinds of different ways.
As a singer, you're creating music. But you're pulling information from the tablet - not creating content on it. This example actually supports the idea of tablets being optimized for consumption over creation. Content is going from the iPad to you, not vice-versa.