I'm not a big fan of Garage Band so I use the app called Studiotrack. I think it's around $10.00. I build my song in BIAB, render it to wav file and move it to Studiotrack through iTunes. Once in Studiotrack, of course the song is set up with the corresponding files in different tracks (drums, bass, electric guitar, etc.) therefore I can mix the song on the fly. I then create two new tracks - one for my vocal and one for my guitar. By the way, I am using the Alesis I/O Dock. I can then add effects for my vocals and guitar. Simple ones like reverb and EQ. These are saved per song so they can be different.

The I/O dock has stereo left and right out (and also headphone out). I use the left and right out sending this to two channels in the mixer - panning the first completely left and the second completely right. Both channels have a flat EQ set. This creates the nice stereo sound.

The I/O dock will also power and charge the ipad. I am sure you can use other input devices if you only need one input for guitar only. Most work in Studiotrack and you can look on the website for details. http://www.sonomawireworks.com/iphone/studiotrack/. Studiotrack also has some cool guitar effects as well - both for acoustic and electric.

I think you can also do this in an app called Amplitube which now has a multitrack recording system and endless guitar effects.

Hope this helps and please let me know if I can help more.

Marty