I'm back from the local store and they said the guitar is perfectly in tune and everything is already well setup....
So I guess my iphone tuner is not working too well......maybe its time to get a real one.

I also picked up the iRIG from them and downloaded the app onto my ipad.
I havent tried any real stomp box but this sounds pretty good to me :D
I've spent the past 3 hrs playing around with all the effects.
Now my finger hurts while typing this post....

KT