Here's what the spectator sees: a person cuts the deck to select a card, which is kept face down. You use your iPhone to take a picture of the card, either alone on the table, or as I prefer at the top of the stack. The spectator sees you select the camera icon and take the picture. To be sure the picture wasn't taken in advance the spectator can put something in the picture like a ring or tableware next to the card to prove it.
You display the picture you have just taken, and shake the iPhone a bit. In a moment, the face down image of the card changes to a face up picture. When the card is turned over, it matches.
The trick can be repeated, and another card will show up. To the experienced, it may be obvious how it works. To people I tried it out on, it was a 'gee-whiz' moment. If you've done a bit of magic before, you can use alternate methods to get the card selected that may be even more mysterious.
I think this is a nifty effect to do at a party or at a bar. Of course you'll need a deck of cards, but no self-respecting conjuror would be without one.
Magic Card is on sale at the app store for US$2.99. Early versions of the app were reported to have some bugs, but I found this release to be rock solid. I think magic tricks will have a place on the iPad as well, and look forward to seeing versions in higher resolution.