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It may not be the most feature-packed app in the world, but Photo Grid is certainly the best I've seen at combining multiple photos into paneled, framed collages.
When you first use Photo Grid, you'll notice that its workflow makes the collage-making process a snap. First, choose one of the five different collage editors: Grid HD, Free HD, High, Wide, or Single. Next, shoot over to your Gallery and tap all of the images you want to work with (you can pick up to nine). And finally, within the editor, choose your orientation, rearrange your images, and apply all of your effects before saving. It's an intuitive process that you should be able to figure out as you go.
The most popular of Photo Grid's collage editors is Grid HD, which comes with a huge menu of beautiful, pre-designed templates that accommodate anywhere from two to nine different photos. It offers different orientations (vertical, horizontal, or square) and lets you fiddle with settings like rounded corners and invisible borders. It even lets you add patterns, colors, and different die-cut edges to your borders. Overall, Photo Grid offers an adequate set of tools, but I still think it could use a couple of extras. It would be nice if Photo Grid let you customize the thickness of your borders and the curve of your collage's panels. I've seen these features on other collage apps, and have found them to be incredibly useful.