The app works pretty easily -- you can dive in and view the top, recent, or upcoming stories in any of Digg's categories, and clicking on each headline sends you to an in-app browser with the page displayed (as best it can be -- of course Flash movies don't work, and lots of the really popular links on Digg are murdered via bandwidth already). At the bottom of each page, you'll find buttons to like or dislike the story (sorry, Digg or Bury), a button to save the story if you're logged in to your Digg account, and the option to share the link. When you select the share option, you can send it off to the iPhone's clipboard, Twitter, Facebook, or Email.
Of course, Digging a story requires you to have a Digg account, and logging in was probably the worst experience I had on the app. It seems like they just send you to an in-app web page, and it's a messy affair. Even just logging in (I would hate to have to create an account using this iPhone app), my 1G iPhone crashed out, and when I reloaded the app, I still had to log in again. It worked eventually, but I feel that the experience could have been handled much better.
Once logged in, you can save stories, do your Digging duty, and dive in and read all of the Digg comments (sometimes more entertaining than the actual posts themselves). Strangely, you can't actually post comments on the iPhone itself, and you can't submit stories, either. I think that, for a lot of Digg users, the inability to submit content would preclude them from using the iPhone app.
Though, if you need a quick hit of Digg on the go, the iPhone app will do. To be honest, I wasn't really impressed. It's a free download, so if you often browse Digg, it does seem like a step above browsing Digg in Mobile Safari, but just barely. If you're looking for some sort of cool, iPhone-specific interaction (how about a "shake for random top stories" feature, or even the chance to submit photos, audio, or even video as stories directly to Digg itself from the field?), you won't find it here.
This is strictly a Digg browser, inserted into a free app, and it's buggy enough to make me think that they've developed it with the aim of porting it across to Android and other platforms as soon as possible. If you browse Digg all of the time, it's well worth the free download, but as an iPhone app, it's fairly subpar.
Maybe TapTapTap will put in some improvements in the coming weeks; they're making a big deal out of the release, and even giving away some custom iPads for retweeting about it. Hopefully, they'll listen closely to the feedback that they're getting, and we'll see a better app in the future.