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PhotoToaster is one of my favorite image editors in the App Store with tons of preset effects and custom options to give your photos a stylized look, all laid out in an intuitive interface. In the latest version of the app, new Lighting Brushes and interface elements for textures and borders make the app even better.
To get started, to "toast" a photo you can either take a new picture with your iPhone camera or choose an image from your photo library. Buttons across the bottom of the interface let you experiment with the different effects.
With PhotoToaster, you can use one of several global effects for a photo or use them as a starting point -- this app lets you customize the effects to your liking using onscreen sliders. Global effects include retro looks, black-and-white effects, and several others. Once you've found your starting point, you can go to each button across the bottom to tweak lighting, common effects, the texture of the image, and borders. Each of the sections lets you switch to sliders if you want to precisely tune your image in real time, but there are also presets if you don't want to get too involved in the process. Any changes you make are nondestructible (in other words, not permanent) so you can always go back to the original picture.