More detailed info coming from Audio Damage: blog | analogindustries.com
"first, the interface has to be class-compliant. That means that it needs to work in an OS X computer without a driver install. Second, it has to be USB1.0-compatible. No USB2.0-only interfaces. And finally, it has to either use less than 200ma of power or be externally powered."
"A safe rule of thumb is that if it has mic pres (especially if it's able to provide phantom power) it's going to need a wall wart or something."
"any App that uses CoreAudio for its playback, and does a good job of using it, automatically shunts its inputs (if it has 'em) and outputs to the USB device."
"One exception to this rule is Korg's iElectribe. As I said, CoreAudio in Cocoa Touch is incredibly complicated and poorly documented, and even big companies mess it up. iElectribe is an example of that. iElectribe _must_ use CoreAudio; it wouldn't work any other way. However, when a USB audio device is plugged in, iElectribe crashes on start-up."
He also says that he already has iPhone OS4 on his iPhone and that OS4 works better with all this than OS3.1.
The iAudioInterface looks nice. Can't wait to see the iPad-specific audio interface: iPad Compatibility | Andrew Smith