[24 May 2012 update: A month after Airfoil Speakers Touch 3 became available, Apple has pulled it from the App Store. -Glenn]
[6 June 2012 update: Airfoil Speakers Touch 3 is without the capability to act as an AirPlay receiver, though it can still receive audio from Macs and PCs. Why? Because Apple didn’t like it, that’s why. -Glenn]
Rogue Amoeba’s has long been a nifty way to redirect audio from a Mac (and later from a Windows system) to other computers running Airfoil and the Airfoil Speakers program, as well as to AirPlay (formerly AirTunes) receivers, including the AirPort Express Base Station. Airfoil lets you decouple audio from any program and system output, and push it over a Wi-Fi or Ethernet network to where you want.
The company charges $25 for Airfoil and gives away, which can only play audio. It introduced  for iOS in 2009 as a free app to receive audio from copies of Airfoil running on the local network. Airfoil Speakers Touch 3.0 adds a native iPad interface, including Retina display graphics.
But the big news is an in-app purchase. For $2.99, Airfoil Speakers Touch users can add, the capability to act like an AirPlay receiver. Any iOS device, as well as iTunes on Mac and Windows, can recognize an Airfoil Speakers Touch-running iOS device on the same local Wi-Fi network as just another AirPlay destination. Even better, because it’s AirPlay, Airfoil Speakers Touch allows direct iOS-to-iOS audio output, something that’s otherwise not available from Apple.
This could be a great use for an outdated iPhone or iPod touch, perhaps one with a cracked screen or bad battery. You could then plug the device into wall power, attach a pair of powered speakers via a stereo headphone jack, and use it to extend audio to wherever you like.