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I’ll just list out a few of the apps I have right this moment. If an app costs money, I’ll try to list out some free alternatives. Hopefully you’ll find that they’re useful!

Instant Messaging:

IM+ ($) [iTunes Link]

IM+ supports Live/MSN, Facebook, GTalk, Yahoo, and many more. Also supports push notifications. It’s a little pricey for an IM client at $10 but it’s one of those apps that will stay with you.
Free alternatives: IM+ Lite or eBuddy

Social Networking

Facebook [iTunes Link]

This is the best way to browse Facebook on your iPhone or iPod Touch.

Entertainment

Flixster [iTunes Link]

This is a great app that lets you watch trailers for new and upcoming movies and releases, view the Rotten Tomatoes or Flixster rating, and even finds the nearest theatres and movie play times. Facebook and Netflix integration is also supported.

Midomi SoundHound ($) [iTunes Link]

Identifies songs recording a short clip or listening to you sing or hum!
Free Alternative: Shazam

News

iReddit ($) [iTunes Link]

The iReddit app lets you view Reddit articles, upvote and downvote, post replies, and subscribe to different subreddits. The free version is ad-supported.
Free alternative: iReddit Lite

Navigation

AroundMe [iTunes Link]

AroundMe finds points of interest around you. Browse by type such as Banks, Gas Stations, Hotels, Movie Theatres, Restaurants, etc. and it’ll show you the distance from your current location. Great when you’re in an unfamiliar area trying to find something.

Shopping

eBay Mobile [iTunes Link]

The eBay mobile app lets you search, bid, and pay for items.

Utilities

Photoshop.com Mobile [iTunes Link]

A good free offering that lets you edit and apply effects to your photos.

Wikipanion [iTunes Link]

A light Wikipedia reader.

Dictionary.com [iTunes Link]

The best dictionary I’ve seen. It stores the definitions on your phone or iPod so you can search even when there is no internet connection. Dictionary.com can also play the pronunciation (internet connection required) and does Thesaurus.com.

ConvertBot ($) [iTunes Link]

There are many free unit converters on the app store, but I think this has one of the nicest interfaces. It’s similar to a classic iPod with a scroll wheel to select your unit type. Complete with animations and sound. I’ve had the most fun converting units ever.
Free Alternative:  Convert Units for Free

Delivery Status Touch ($) [iTunes Link]

Expecting a lot of packages? Deliveries lets you track each item and displays them in a very pretty view. It supports Amazon, Apple, Canada Post, DHL, UPS, USPS, and many more. (Full list)

iSSH ($) [iTunes Link]

iSSH lets your SSH into some server and also supports VNC. Very useful if you need to remotely administrate something.

Dropbox [iTunes Link]

Dropbox (for Windows/Mac/Linux) is a service that lets you store files and lets you sync them across several computers. With this app, you can access files such as photos and documents that are in your Dropbox as well as upload photos from your iPhone.

Backgrounds [iTunes Link]

An app that lets you easily browse and download backgrounds that fit for your iPhone.

Games

Implode! ($) [iTunes Link]

Try to blow buildings up by strategically placing different bombs.

Tap Tap Revenge 3 ($) [iTunes Link]

Music game with free and paid tracks.
Free Alternative: Tap Tap Revenge 2

Jailbreak

These apps are available in the Cydia store for jailbroken iPhone or iPod Touch users.

Backgrounder

Lets you run apps in the background. Hold the Home button while an app is running and you will enable backgrounding for that app. Hold it again while the app is running to disable backgrounding. This is useful if you need to switch to another app for a little bit and need to go back quickly. There is an indicator on the backgrounding app’s icon to show that it is still running. Remember that leaving too many apps running in the background will reduce battery life and memory.

SBSettings

An extremely convenient way to change settings without going into Preferences.app. Just swipe the top bar and you can enable or disable 3G, EDGE, Bluetooth, WiFi, kill processes, and change brightness – all without leaving your current app.

3G Unrestrictor ($)

Tricks apps into thinking that you are connected via WiFi. Useful if you want to download large files from the App Store over 3G, view higher quality YouTube video, or use VoIP apps. Includes an SBSettings toggle.

Rotation Inhibitor

An SBSettings toggle which lets you enable or disable rotation for apps like iPod and Safari.