This is a demo of Wave Machine Labs' Voice Band, a $2.99 iPhone app that turns your voice into an instrument in real time.
To use it, you sing into the iPhone, and it translates your voice into a guitar or a bass, synth, etc. In the demo video above, the entire arrangement is created with just a voice singing into the iPhone.
Other features include Auto pitch mode, user-controlled scales and an effects processor with distortion, reverb and delay.
I guess I've been trying to recreate a Korg Electribe all this time..