I've really enjoyed the camera on my iPhone - the quality is pretty good, and I always have it with me. There are lots of fun camera and editing apps available, so I finally downloaded one.
Instagram is a free app with a fun set of filters, as well as the convenience of being able to share your photos directly with Twitter, Facebook and Flickr. I've had a lot of fun playing around with it - it adds another layer of artistry to iPhone photography. Not only is it fun taking the picture, I can really be creative with how I choose to edit it. Considering how little I know about photography, I'm pretty happy with the quality of the images I'm creating. I've played around with some image editing before - mostly with Picasa and Picnik, but I can't get over how incredibly easy this is on my phone!
After whetting my appetite with Instagram, I downloaded Camera+ for $0.99. It has even more features, and includes the same ability to share photos to Facebook, Twitter, and Flickr. I haven't experimented too much yet, but I'm looking forward to it.
I think both of these apps are a great value for the cost - and I love the convenience of editing and uploading them directly! I rarely remember to bring my camera with me except on trips, and having to wait to plug it in to my computer to export and upload pictures can be a pain.