There aren't a lot of apps that specialize in portraits, but Photo Shaper (on sale for US$1.99 on the App Store) does just that.
The app is simplicity itself. Take a photo using the camera controls in the app, or grab something from your Camera Roll. The app mattes a circle around the photo, and gives you a wide choice of backgrounds. When you are happy, you can share the photo with Twitter, Facebook, Instagram or, of course, email.
The results look professional, and I think the app would be good for creating profiles on social networks, or just adding a unique look to any portrait.