I just added the ProCamera app to my iPhone and I liked it so much that I moved the regular camera app to a back page and kept ProCamera on my iPhone home page.
I think it does two things really well. It has image stabilization which has helped me get sharper pictures. It also has a zoom feature that works really well. The top picture was taken with the regular camera app and then made into a polaroid while in iPhone. The second picture was taken with the ProCamera app - zoomed in closer and also turned into a polaroid while in iPhone. I was pretty impressed with how sharp the "zoomed" in picture was.
ProCamera doesn't have fancy filters, bells and whistles. It has more features for the iPhone GS and promises to soon have flash and night photography capabilities. In the mean time I am really happy I can get sharper pictures and zoom in without losing quality.