With the free app, you get options to blur or "vignette" (that's the shadow effect seen around the outside frame) the images, as well as adjust the saturation, brightness, and contrast. Once you save the image, you can put it back on your photo reel or export it out to email, Twitter, or Facebook. Getting the paid version for 99 cents allows a higher resolution for output, but as an amateur just having fun, I had no issues with the free version.
Again, if you're a photographer who knows his or her way around Photoshop, something like this probably isn't what you need; you already know how to dive in and edit pictures, and your best shots probably aren't taken with an iPhone anyway. But as a super casual photographer who likes the tilt-shift look and playing around with the iPhone 4's great camera, I really enjoyed this free app. It's definitely worth a download.