Smule raised $3.9 million two months ago. Dr. Ge Wang, Assistant Professor of Computer Research in Music and Acoustics at Stanford is the co-founder of the company and their first application was a hit. The first app is called Ocarina and now they have released their next application Leaf Trombone World Stage [iTunes link].
The Leaf Trombone is a traditional Chinese leaf instrument. To use the application, players run their fingers across the touchscreen and blow into the iPhone microphone. Leaf Trombone has a music box that also accompanies the music you play. You can also download music for Leaf Trombone. The application tells you if you hit the notes correctly with the music when blowing into the microphone.