This was an essential app from the get-go, and it's been steadily evolving—like the site—for the last year. Version 3.0 was a total refresh, and supports nearly every one of Facebook's sprawling features, sometimes better than the site itself.
The new, panel-based interface takes a little getting used to, but once you're acclimated to it it's the most effective way to throw yourself, fingers first, into the black hole timesuck that is Facebook.
From the App Developers: Facebook for iPhone makes it easy to stay connected and share information with friends. Use your iPhone to start a conversation with Facebook Chat, check your friends' latest photos and status updates, look up a phone number, or upload your own mobile photos to Facebook while on the go.