With the popularity of "apps" (applications), the Apple iPhone has become much more than simply a phone. With the release of firmware version 3.0, Apple included the native ability to use your iPhone as a microphone, saving the recordings to the iPhone's on-board memory. The recordings automatically sync back to your computer via iTunes, added to your iTunes library.
Press the "Power" button on the top of your iPhone to turn the device on.
Tap the "Utilities" folder. Tap "Voice Memos."
Tap the red circular record button. The menu bar will turn red and the iPhone can be used as a microphone. Optionally use the in-line mic on the included iPhone headphones. When you are finished recording, press the pause button. After the recording finishes, press the silver circular button to view and playback the recordings. Also opt to share the recordings via email and MMS.