I've seen a fair collection of collage apps for iOS and CollageIt is a nice free app that does something few of the other apps bother with: letting you edit photos within the app itself. Most require you to finish the photos in another app and then create the collage.
This little app gives you an almost unlimited ability to tune the layout, frames and color backgrounds. The backgrounds can be solid or a gradient.
Pictures can be moved to improve composition within a frame, and tapping a photo displays a rather complete set of editing tools for brightness, saturation, sharpness, orientation and so on. It's very nice to see this all in one app, which makes touching up images and creating the collages a quick operation.
When you are done, save your photo to your camera roll, email it or send it out via the usual social networks and Flickr.
Every so often I saw a small, unobtrusive ad at the bottom of the screen, but it's a small price to pay for such a flexible app. CollageIt is perfect for quickly sharing photos of a gathering of friends, a birthday or vacation photos with friends or family.
If you're a frequent iPhone photographer, this universal app should be on your iPhone or iPad. CollageIt is optimized for the new iPhone 5, and requires iOS 4.3 or greater.
You can see some sample screens in the gallery.