If you have an iOS phone, go to the App Store and search for "MuniMobile." If you are on a computer, click here to go to Apple's iTunes Preview site to read about the application.
Since I don't own an Android, I can't verify if it's available.
As I was a beta tester, I was able to play around with the app and I did buy a couple of single ride fares to try it out. I didn't encounter any fare inspectors, but all the bus drivers knew what it was and let me through without asking any questions.
The only real odd thing about the app is the Muni logo is backwards when the animated bus passes by from the left to right; the MuniMobile ads posted on the buses show the bus going the other direction with the logo facing correctly.
To learn more about my experiences with the MuniMobile application, visit my other blog entry.
Lastly, if you want a personal recommendation, stick to your Clipper Card; it's the only method to get inter-agency transfer discounts or free Muni rides from Daly City BART. MuniMobile is better for tourists (especially the Passports on sale), people who rarely ride Muni or wants to pay for their rides with a credit card, and as a backup fare option if you run out of Clipper Card money.