If you stumbled upon an interesting video on YouTube while on iPhone or iPod Touch and want to extract to save the MP3 from the video here is an app for that. This Cydia app is available for jailbroken iPhone and iPod Touch.
YouTubeToMp3 is a free Cydia app that can convert YouTube video to MP3 file and save it on your iDevice. Once after installing the app from Cydia you need to feed the YouTube video URL to start conversion. The app will extract audio alone and save it in MP3 format at the location /var/mobile/Media/Downloads.
YouTubeToMp3 is available under BigBoss repo for free.