All your instruments from GarageBand for iPad are ready and waiting; all your settings, ready to be tweaked. The design team has made some very clever adjustments to compensate for the iPhone's small screen: The instruments themselves take up the full length of the screen, saving a small amount of space for the toolbar, which offers all your controls, hidden in several nicely-defined menus.
To access alternate instrument styles, other instruments, or to return to your songs list, tap the upside-down triangle in the upper left corner. If you want to swap back to your song timeline for editing, tap the timeline button immediately next to it. This button is intelligent: When in timeline mode, the icon switches to that of the instrument you have selected; tap it again to return to instrument mode, and it will turn into the timeline icon again.
In the center, you have your standard play controls: A button for returning to the beginning of the song, one to Play/Pause, and one to record. Off to the right, there are one or two icons, depending on the complexity of your instrument. The first--the effects icon--appears only if your instrument has additional toggles that the iPhone simply doesn't have space to display. (For example, the Autoplay knob and Chord/Notes toggle for the Smart Guitar.) Tap the icon, and the play area will slide down, revealing the extra controls.
I like everything about this implementation. For one, the effects area still provides you with some access to the instrument (or, in the case of Smart Instruments, their chords) so that you can try out effects without constantly switching views. In addition, the GarageBand designers have been able to have a bit of fun stretching the instrument design metaphor, which leads to really beautiful discoveries: Tap the effects icon while in Smart Guitar, for example, and as the chords slide down, so does the entire guitar, revealing the curve of the instrument.
The last icon in the toolbar--the ever-familiar gear icon--has been multi-purposed here into a single window for track, section, and song settings. (In the iPad version, all three have separate pop-overs.) Like the effects view, you can test out a tweak made without having to leave the screen by tapping the volume icon in the upper left corner; it'll play a snippet from whatever you've been working on.