SO many choices actually. My current favorite one is
Reactable based on the
physical ReacTable (which Bjork toured with.) I
made a little video of me testing it out (kind of a crappy video though, I was using the iPod Nano to record with.) I like this because it takes a different, futuristic approach to modular synthesis, but in a fun and easy way.
There is also
NanoStudio which gets high praise for being a full blown synth studio (synths, drum machines, sequencers, everything you need!)
Rebirth of course (from
Propellerheads, the makers of Reason for Mac/PC) because, well, it's Rebirth!
synthPond which is simple and fun (like a cheap Reactable)
Brian Eno's
Bloom (yes, THAT Brian Eno!) more of a meditative app, but very addictive and intuitive.
And if you want the closest thing to a real synth (but for iPad only)
Korg's iMS-20 is great!