dsd,
The issue with creating a sound level meter (SLM) for iPhone is finding an appropriate way to connect a suitable measurement microphone. To measure any kind of meaningful sound level, a calibrated measurement microphone, with known characteristics and tolerances, is required.
I have successfully connected a Type 1, 1/2-inch measurement microphone to the iPhone, but the iPhone's headset input is much too sensitive. Once we get the hardware figured out (proper gains, not too bulky, etc), we can look at distributing a SLM app for iPhone.
Ben