Garageband is a well known app that turns your ipad into a collection of instruments with a full-featured recording studio.  You can play pianos, organs, guitars drums and bases for the sweet price of £2.99 

Rock mate is a new one that I have picked up for free today, but is normally  £2.49. Similar to garageband, you can compose, record and play song with up to four rockmates on one ipad. 
Little Fox Music Box is a delightful app for EYFS/KS1. It is £1.99 and in my opinion worth every penny! You can read a review of it here. It really is a little gem.

Singing fingers allows you to paint with sound. Fantastic!