Now with a calibration feature which zeros out the response in case you are surrounded by metal. Also, sound can be turned on and off.
Metal Detect makes the iPhone 3GS into a portable metal detector by means of using the internal magnetometer.
Metal Detect provides visual and audio feedback of the intensity of the distortion in the magnetic field due to a nearby metallic object.
It can be used to detect the presence of keys, cell phones, speakers, and many other metallic objects.
Check out a video demo of Metal Detect here:
The attractive user interface will make you feel like you bought a metal detector off a store shelf.