1. The New Tweetie 2 for iPhone
A class above anything else I've come across: auto j.mp, multiple accounts, offline mode, Instapaper syncing, super-quick. Goodbye TweetDeck.
http://www.atebits.com/tweetie-iphone/

2. Instapaper
Seamlessly brilliant way of capturing posts, articles, & other content to read later on your iPhone; been using for a while, just gets better. Great for subway reading.
http://www.instapaper.com/

3. Shoot It
Transforms photos into real-life postcards that get sent in the post via pre-paid account. You can't beat real mail arriving in real mailboxes. New old skool.
http://www.shootit.com/

4. Dropbox
Ridiculously easy way to share, store and back-up files online across all your computers & iPhone.
https://www.getdropbox.com/

5. AutoStitch
Frighteningly good stitching of images together; a significant step-up from PanoLab. Makes even the incompetent look gifted.
http://people.cs.ubc.ca/~mbrown/autostitch/autostitch.html

6. Google Analytics
Everything you've come to love about the web app, now on the phone; stay up to speed with just how unpopular your Posterous is.
http://analyticsapp.com/

7. Photoshop Mobile
Elegantly simple way of producing cool images on the iPhone, which can be shared on the web. Quite ace touch-based (vs slider-based) interface.
http://labs.adobe.com/technologies/photoshopmobile/