The built-in camera, along with a few apps, has for the most part replaced my digital slr and photoshop. Especially for throwaway blog pictures; most of the photos on this blog were taken with my iPhone. And since my phone's always with me, I always have a camera handy, with nothing extra to carry.
Here's the built-in camera app with full screen preview, you hit the little camera icon to click away:
Then you open PhotoGene, to crop (I love the square crop!) and edit exposure and levels:
This is what you get:
Then CameraBag, where the real fun begins. It has filters that stimulate different camera effects, including holga and lomo cameras (my favorites):
Here's the lomo (lolo):
Here's the helga (holga):
And you can also combine filters. Here's the photo with lolo applied, and then helga:
There's a CameraBag group on flickr, where you can really see the potential.
This is only semi-related, but very interesting. This artist, Jorge Colombo, sells prints of digital art "painted" directly on the spot using an iPhone app called Brushes. (Buy these prints here, for $20, better hurry!)
One of them was recently the cover of The New Yorker. Pretty unbelievable, if you ask me.
Can you believe this dude painted that with his finger on his iPhone screen? Crazy.