In this video, Bill Van Loo demonstrates using TouchOSC, OSCulator, Ableton Live and AudioDamage's BigSeq plugin. TouchOSC is an interactive control surface that outputs OSC messages, which can then be converted to MIDI notes and CC data by OSCulator and other programs.
Check out how much fun it is to control BigSeq with TouchOSC!
For more music in this vein, check out chromedecay:
OSCulator (for converting OSC to MIDI)
Screen recording was done with iShowU HD. This is my first time using it, and I'm quite pleased so far.
The audio recording during the screen recording wasn't so good because I was using the MacBook's built-in mic. Attempts to get my external Firewire audio interface routed into iShowU HD through Soundflower were unsuccessful at first, but I'll make sure I get that working for future videos.
The iPod Touch was recorded with the Panasonic Lumix DMC-FZ18 camera.