Basically, you import a color photo from your camera roll, or take one live. You set the image to black and white, or some other monochrome color, and then paint the color back in to selected parts, like a flower or a face. The result can be quite artistic, and something different from the standard color image. Like all effects, it should not be over used, but when used sparingly and with thought it can be quite effective.
You can adjust the size of the brush, and the cursor nicely magnifies so you can really see where you are painting. You can save images to your camera roll, or share on Facebook, Twitter and Flickr. The app also supports AirPrint if you have a compatible printer.
The app is not universal, so it's really an iPhone or Pod touch app. The app is on sale for a short time at US$0.99 and then goes back to $2.99. Color Splash Studio requires iOS 4.3 or greater.
It's the kind of unique app that should be in your bag of tricks if you are an avid iPhone photographer.
There are some screen shots and examples in the gallery below.