The touch screen will not provide an adequate replacement for buttons and knobs - if you emulate buttons and knobs, that is. With capacitive multi-touch, there's a real opportunity to rethink the interface here. Interaction in the past was limited to what hardware can do in real life, so why should we keep those limitations now that they don't exist? The music world, unfortunately, has this "old-school" mentality for the most part. The focus is on previous hits and successes with synths and hardware that worked in the past (in this case the Electribe), not with what could be created with new ones. There's a real opportunity here that will take time to play out.

As for the sound card - I agree, the DAC in the iPad is probably similar to the other iDevices in the past.. Pretty good for consumer standards, but poor by pro standards - not to mention multiple outs, ins, etc. Where the iPad stands to gain the most is as a remote controller for a larger rig running on a laptop - via Bluetooth or Wifi. Heck the audio jack could be used for modulated data and have it interpreted by the host machine as a control input, a la Serato et al. Ever since the $2k Lemur people have been hungering for this - it will happen sooner or later!