Free App PocketGuitar For Apple’s iPhone and iPod Touch
Though i am not a iPhone user but this innovative application has just caught my attention.. this app is a must try for iPhone users(see pic). The innovative free application will let you play virtual guitar just like a real guitar on your Apple’s iPhone and iPod Touch touchscreen. So now if you own a iPhone or Touch you can download this free application PocketGuitar from ModMyiFone.com Community Sources. What more people can play guitar and listen to a song simultaneosly. The free application for iPhone is developed by Shinya Kasatani.
P.S- watch your nails and be careful otherwise you might scratch your precious iPhone’s display let alone guitar learning and do you have younger siblings …great let them learn the virtual guitar too. 
Google code Project page for latest features and developments
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The fingers and the touch gadgets somehow always have the risk that you mentioned towards the end…iphone seem to be attracting a lot of app developers…
AWWWW sum !!!