Weeee!!!!! Ok, these are my favourite applications...
Flashlight is useful
Labyrinth LE is fun
Zippo Lighter is cute
Writing Pad is very cool
Shazam is a definite - it is VERY impressive
Tap Tap Revenge is fun
PhoneAid is worth having
And the games I have are:
FS5 Hockey (2 player air hockey for the iphone!)
MazeFinger is ok
Moonlight lite is a great mahjong game
Touch4 is a good Connect 4 game
There's various free Sudoku games