Autocreate Node Reference adds a node reference field and automatically creates the referred node by cloning a template node. It was inspired by the discussion at http://drupal.org/node/112432. This module was originally developed for http://rageagainstthecubefarm.com, where it was used in the Corporate Reviews section to create nodes and references for both a webform and an organic group to go along with a new corporate review posting, but it's capable of creating references to any content type.
Mea culpa to 6.x users
7.x is a ground-up rewrite to take advantage of the Field API. It wasn't until the rewrite process that I realized the 5.x and 6.x versions were hacks. Instead of autocreating a node and storing the nid of said node, they autocreated a node and found it later by searching for the title. The end result looked right on a page, but it can't be said to have actually been a field like it says in the module description. Because of that, update.php can't help with going from 6.x to 7.x. So, to update existing content with ANR "fields", you will need to edit your existing node(s) (a simple open and save should be enough).