I've been playing with the original iCade for a few months (see original article here), and it's been great fun, but it sure ain't portable.
Well, the folks at ION have come through. At CES, they showed off their new iCade Jr., which brings arcade-style joystick and buttons from the larger model to the iPhone and iPod touch.
ION also demonstrated the iCade Core, which works like the original iCade, but doesn't have all the cabinetry. This makes it more portable and more affordable.
The coolest gadget they showed was the iCade Mobile, a handheld container for the iPhone or iPod touch that is highly suggestive of a Sony PlayStation Portable. The cradle swivels and locks in portrait or landscape mode, so you can play just about any game, as long as it has incorporated the Bluetooth input methods, as the buttons and joystick directions correspond to keyboard buttons. There are over 100 apps available for the iCade controller systems, and the latest list is at IONaudio.com.