Hey, fellow actors! I wrote a blog post on exactly how to use an iPhone as an external microphone when making self-tapes. I was surprised at what a difference it can make. Check it out: http://www.thatjonathanriggs.com/sound-better-an-iphone-hack-for-actors/
Yes, I suppose that would be cheaper than buying an iPhone, but since I already had an iPhone anyway, it made sense to use it. And I was pleased with the results.