Cool application of the day: a piece of third-party software that lets you transform your Apple iPhone or Apple iPod touch into a wireless touchpad for your computer.

Touchpad enables you to create a wireless touchpad on your iPhone, letting you control the mouse on your computer using just the handset. You can move the mouse around, click, double-click, and even drag items by double-clicking on a file but keeping the touchpad pressed down.

You can scroll vertically by click-and-dragging on the right edge of the Apple iPhone screen.

Replaces computer mouse

You can use Touchpad to control videos, show pictures, advance slides in a presentation – pretty much anything a traditional computer mouse can do.

You’ll need a hacked Apple iPhone in order to install the Touchpad, wrote developer and computer science PhD student Jahanzeb Sherwani on his blog. A YouTube video demonstrates how the technology works in practice.

Now we’re just waiting for the tech to be developed even further – imagine making the Apple iPhone into a wireless gamepad for video gaming…