The iPhone may not be short of apps that'll add effects to pictures you've taken with your phone's camera, but most of them are paid-for apps and provide a fairly limited range of effects. Pixlr-o-matic trumps them not just because it's completely free, but also because it offers a bumper crop of different effects that you can apply to your snaps.
These range from colour and lighting tools, to more elaborate vintage effects. You can also layer various effects on top of each other and add a frame to your image when you're done. The app is beautifully designed, giving you the impression that you're working in your own private dark room.
It's free and offers a load of great quality effects. What more could you want?