I got a couple of these to try and have been very impressed with them. Basically the Lupo is a high quality mic that plugs into the headphone socket of the iPhone/iPod. In turn it is used with any of the many available recorder applications (even the Apple one!) to turn your device into a dictaphone. The recorded sound quality is very good and it can be used to record in larger spaces.
The only downside is that when the mic is plugged in, you no longer hear any iPhone speaker output, because it thinks that there is an external speaker attached. All you need do is unplug the microphone and you will hear through the speaker again.
Definitely worth the price, do like me and get a couple, one for the desk, one for the rucksack!