There is a plethora of various photo apps around, both for taking pictures and for sharing them on social networks. But Instagram is an excellent solution for both, and it's elegant enough to make you reconsider your current workflow. Personally, I've just been taking pictures with the standard camera app and uploading them with the official Twitter app. But Instagram adds the ability to make your photos artistic with a wide number of filters, add location and social network data to them in the app itself, then share them with any number of social networks, from simple stuff like Twitter and Facebook to more complicated connections like Flickr and even Tumblr.
The app is completely free, too, and they're planning to keep it that way. There may be add-ons for filters in the future (or, I presume, some advertising on the actual Web pages created by the pictures), but how awesome that a great app and service like this appreciates the value of free.
Like I said, you probably already have a workflow for taking and sharing pictures from your iPhone, but Instagram is good enough to make you give it a shot anyway. It's a free download and is available on the App Store right now.