I have an old 3G iphone and wanted to use it as an audio baby monitor at home on our WIFI network. I have the app running with the screen off on the 3G (so no light issues) and on my iphone 4 i can listen in and even be listening while using other apps. Sound quality/volume is great in my opinion. Not sure how long I can run the 3G on battery power before it runs out, but I can always plug it in to an outlet.
petrocket about Baby Monitor - WiFi & Bluetooth w/Background Audio, v1.3