ClassicINSTA! Free, the only thing I don't like is you can't preview the outcome.
Tiny Planet! Also free. Every photo doesn't work, but when it does the outcome it pretty neat.
Instagram. Free (see a trend?), and the top rated app.
P.S. - you can find me on instagram - username patchieverbs!
I am only sticking to free apps right now because I just dropped $200 on the phone (yikes). But once a paycheck rolls in I may go for a few others!
Do you own an iPhone? What are your favorite apps (doesn't have to be camera related!)? Any tips?