Hipstamatic isn't a new app, but it is worth a look if you've never seen it before. It replicates the look and feel (and functionality) of those old point-and-click and even toy cameras that you might have carried around as a kid (depending on your current age of course). Nowadays, we can capture the world in digital, and soon HD, clarity, but Hipstamatic creates images the old fashioned way: with plenty of misbalanced levels, weird film coloring, and lots of dust and grit. You probably won't see the picture better, but especially if you've got a nostalgic bent, it'll probably make you feel it a lot more.
The app is currently US$1.99, and developers Synthetic Corp have added a few different "hipstapaks" for in-app purchase, which will update the various options available for cameras, flashes, and lenses. Give it a shot if you do lots of photography with your iPhone, and appreciate the retro.