Great iPhone/iPod Touch Apps
A huge frustration for me is the lack of any kind of subscription service that supports the iPod. Being able to buy songs directly from iTunes onto the iPod is convenient, but expensive and not what I want. A lot of times i'm in the mood for a particular song or artist, but it doesn't mean I want to buy something (yet I'm not into just stealing it). Rhapsody and Napster are both excellent subscription services, but shut out by Apple.
A sort of happy median between the subscription and buy model is streaming music from services like last.fm and AOL Radio. Both have excellent free apps available that have made the iPod a lot more enjoyable for me.
The last.fm app is fully integrated with the web site, and lets you log into your account and quickly find music. Excellent UI - my only complaint is the current version has crashed twice on me. Hopefully they will keep updating it.
AOL Radio has offered a huge selection of streaming radio stations for years. The AOL Radio app brings that content to the iPod - it also interestingly enough adds local stations to the mix that offer streaming, and can use your location to find them. There are so many specialized radio stations in every genre imagineable, and it's all very accessible.
Another entertaining app is Joost. It brings together all kinds of great video content, including current music videos. I haven't spent too much time with it, but so far I have been really impressed by the quality of the video and the content offered.
Finally, an app that I use daily is the excellent Facebook app. It makes it incredibly easy to keep up with what is happening with your friends on Facebook, and to update your status and comment on things. It's very intuitive to use and makes Facebook even more addictive.
The best thing about all the apps I mentioned is they are free. I don't want to talk about how many paid apps I have already bought.