The iPhone lends it’s self equally well to typing a text note as well as audio notes. The system has a notepad application to take quick notes (see another post we did on how to get notes off of your iPhone and Touch to the desktop) and a microphone/speaker for audio, but no built in audio recorder.
Audio recording applications continue to be at the top of the list of most popular Business and Productivity applications available.
I will cover two of the many options here as an introduction of what you might do with audio: QuickVoice and Note2Self.
QuickVoice is exactly what you would expect out of a handheld audio recording device.