What differentiates the iPhone from other smart phones is the the App Store where you can choose from over 100,000 applications. With that many choices it is difficult to weed the good from the bad.
Here are some of my favorites that I use whenever I take photos with my iPhone 3GS's 3 mega-pixel camera.
Photogene- This is the Photoshop of iPhone apps. Adobe has a free app called PS Mobile, but it very limited. Photogene has a wide assortment of tools like exposure compensation, color correction, cropping, sharpening and blurring filters, levels, 16 different picture frames, rotation, image flipping, undos and redos, re-sizing and photo sharing to Twitter and Facebook. If you are going to pay for just one photo app, this is the one. Currently $2.99, but well worth it.
AutoStitch- The app if your are interested in making panoramic photos. Just take a bunch of photos making sure you overlap them and you can combine them in AutoStitch. The app is fast and after you are done it has a crop tool to straighten the jaggy edges. If you don't do a good job of overlapping the photos, the stitching could have some ghosting and errors. Currently $1.99.
Pano- My other choice for panoramas is Pano. The difference between it and AutoStitch is that it has a virtual guide that helps you line up your panoramic. It superimposes part of the last photo you took and you use it to line up your next one. Because it is more precise, your panoramics have a higher success rate. If you are a hard-core pano fan, you will be buy both. Pano is on sale now for $1.99.
CameraBag- For easy and fast retro looking photos use CameraBag. The Helga filter replicates using a Holga or Diana toy camera by vignetting, cropping your photo into a square and boosting contrast and saturation. Other arty photo effects include cross-processing, using a Lomo camera, a Polaroid picture, a few black and white looks, infrared, old color and fish-eye. I like this app better than Chase Jarvis' Best Camera app because it is dead simple to use. $1.99.
TiltShift - The big problem with cameras with tiny sensors is that every photo has everything in focus from front to back. Pro cameras with big sensors look "film-like" because of the selective focus and shallow depth of field you can achieve with the right lens. What TiltShift does is one thing, makes part of your image blurry with a selective filter. The resulting photo has a look that can emphasize your subject by blurring out either the background or foreground. The app is called TiltShift because of it can used like a speciality Tilt-Shift lens that changes your plane of focus on your photo by moving the front and back elements. Other real world examples are usually made from a Lens Baby or a view camera. A popular trick is to shoot a landscape from a high angle looking down and making the scenary look like toy-like. Currently $.99.
iTimeLapse Pro- This could be construed as a video app. iTimelapse Pro takes still images at a rate and length you determine and combines them into a time-lapse video. If you have a tripod for your iPhone and love time lapse, this could be for you. You can make single frame animations using this technique too. It is $2.99.
If you have several apps, you can save you photo in one app and open it up in another to make further changes. The combinations of two different apps can make for even more granular control of your photos.