Air Display is a very innovative iPhone app with support for Windows and Mac OS X. The application allows you to "stream" your desktop or, rather, part of your desktop to your iOS devices. The iPhone 3G/S and 4 and the iPod touch are supported, but this is an application that is best used with the iPad, because of all that screen real estate that you get.
In short, when you install the Air Display server on your Windows or Mac OS X computer, the application installs a new video driver, which for all intents and purposes acts as an extra monitor. It behaves just as a monitor, and you can choose to extend your desktop to this new monitor if you want to. After the server is installed on your computer, you can simply launch the iOS app and if the devices are in the same network they will be able to communicate. Air Display makes it easy to control your computer from a distance or to get a wireless monitor that you can freely move around. You can use your hands on your iOS device to control the pointer of the mouse and to click around.
As a second (or third) monitor, Air Display is a little sluggish. The performance that you can get from a wireless display over a wireless network (using today's standards) is very limited. But you can get a taste of what the future holds with Air Display. I wouldn't recommend playing video or graphics-intensive apps, but you can move any other type of window into the Air Display device by simply dragging and dropping. IM windows, panels, calculators, notepads, e-mail messages; they can all be moved there.