Not sure exactly what he means by "all-in-one" but if an app running on a distinct, general purpose device counts I'd take Ableton Live on a Macbook over this a million times over. There are certainly some appealing things about this but it's still a toy compared to the alternatives.
1) I was referring to portable all-in-one units like the Boss Micro BR, Tascam field recorders, etc. Maybe I should have been more explicit about this.
2) Ableton is great for recording and processing, but for creating virtual instruments without external hardware, I'd prefer the iPad interface.
What do you mean by "creating virtual instruments"? Do you mean presenting a virtual instrument interface on screen? If so, I do think the touch surface has some real advantages over a mouse.
I'm still not sold on virtual keyboards and drum surfaces on touch screens though. So far I haven't seen one I'd prefer to a real midi keyboard and drum pads.
"The condenser mic in my iPad (again, first generation) is acceptable, but leaves something to be desired, particularly on the high end"
If the mic on the iPad is acceptable to the reviewer. it goes pretty far to show how he reviewing the product (not as a DAW. but as a really awesome toy).
TouchOSC + your choice of DAW is going to be pretty common for a while I think.