Here are my favorite apps for the iPhone & iPod touch:

Birdfeed - a Twitter app.
Tweetie - another Twitter app.
Tapbots' Weightbot and Convertbot, both excellent utilities.
ngmoco's games - I particularly like Rolando.
FlightControl - a really addictive game.
Dizzy Bee - a neat game that really takes advantage of the accelerometer in the device.
Trism - a neat puzzle game.
AroundMe - for finding places close to you.
Source(s):
http://birdfeedapp.com
http://atebits.com/tweetie-iphone
http://tapbots.com
http://ngmoco.com
http://itunes.com/app/FlightControl
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=284987824...
http://itunes.com/app/Trism
http://itunes.com/app/AroundMe

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Looking at my phone there are a number of applications that most people would consider interesting

• craigsphone - allows easy access to craigslist.org
• Shazam - identifies music.  Place phone microphone near the speakers on your radio
• Flashlight - Lights up the screen.  Find things in the dark.
• Evernote - Easy way to save your thoughts, websites, photos, and voice memos then access them on the go.
• MotionX GPS - Use this to record your walks or runs.
• Trace - Free, fun game with 100 levels.
• WikiHow - Access to hundreds of How-To Wikis
  

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