Yep, Photoshop on the iPhone. At first glance, it's not much different from other light iPhone photo editing apps, except it's tied to their online service, but the effects and interface look above average. And, uh, freeness.

The tools are basic—you can crop, adjust exposure, saturation, and tint, among others, with some standard special effects like soft focus, colors and filters like "warm vintage" and pop—but using entirely swipe-based gestures as a virtual slider for how intensely or lightly the effect is applied is natural and easy. Here's a photo I made with it:
[iTunes, Thanks Weston!]

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