The "Gadget Bottle" is a plastic water bottle with a recess in the front to hold a phone or MP3 player, held firmly by a rubber strap. The idea is to allow easy access to your gadgets while working out without having to put them in your pocket or carry them around separately.
You could do the same with a rubber band and another bottle, but the rectangular recess probably does help keep things in place. Plus they're only charging a $8.25 plus $2.50 shipping, so it's hard to smack them around too much, especially when I could see some people finding this quite handy. (Bonus: I'm all about reusable water bottles these days.) Good luck, BevyTech, LLC!
Product Page [GadgetBottle.com]