The app itself does what it claims. The mic on your iDevice picks up the sound unless you are using the headphone jack.
Now my only gripe is that I dont believe that the animation goes in time with the beat as well as other apps of its kind.
The biggest plus and its a biggie for me.....You can do VGA out which means it is compatible with some car stereo monitors that can run apps off your phone.You cant control it from your car stereo touchscreen but at least you can see the output :)
appVader11 about Audiogasm: Music Visualizer - Real time animation of audio and music for iPhone, iPod touch, and iPad