I purchased an app for the Ipod Touch called ToneTable, which acts as a trigger control for software like Traktor or Serrato Scratch. It sends out a control pitch signal, like the timecoded vinyl records that are distributed with such mixing applications.
The app shows a virtual record and it has a pitch control to allow beatmatching as well as realtime pitch tweaking buttons. After hooking it up to my Traktor audio interface, I was indeed able to mix with it. But I really wanted to see if it was possible to scratch with it. And while it isn’t quite as precise as real vinyl; I was very impressed with the results. Below is some video I shot to compare it scratching with tradidiotnal vinyl as well as the Traktor control vinyl. It takes a bit of getting used to and finding a way to keep the Ipod in place is a bit of a challenge, but all in all this is a very impressive little app.
With a little practice, two Ipods, a mixer and a laptop, you could certainly perfrom with this amazing piece of work.