I picked up the Belkin iPhone armband holder the other day for $20 at Target. It works but it's a really really really tight fit. I saw a few generic ones online advertising they would work with the moment but they looked pretty cheap. The Belkin has a neoprene type material in the back and I was able to stretch it enough to make the phone slide in/out pretty easy so I think it will work out well.
I think this is the one I have:
Belkin Components iPod Touch 2G Sports armband -Black (F8Z384) : Target