Pxture is a very clever free app that does some complex Photoshop-style text effects right on your iPhone. Select a picture from your camera roll, or take a fresh one using the app. Type some text, and the image appears inside the text. All the masking and complex stuff is done for you, and it's a nice effect. The app lets you move the text over the photo, change colors of the text or flip the effect so the letters are solid and appear over your photo.
Of course, the app developers will be glad to sell you some additional masks and fonts for US$0.99 each, but I got along fine with what was provided for free. If you wish to explore more effects, the extras may appeal to you.
Pxture photo effects
I found Pxture easy to use, although the adjustments for line and letter spacing didn't seem to do anything. The finished product looked great, though. You can save the final images to your camera roll and send them via email or the usual social networks.
For the photographer who is looking for something different in terms of effects, this is a nicely done app. It requires iOS 6.1 or later. It's not universal, but is optimized for the iPhone 5.