As I impatiently await the arrival of my iPad camera connection kit, I've been playing with some of the available photo manipulation apps, and there are a bunch of free ones.
PhotoPad is the first, and gives you cropping, color adjustments, color swapping and drawing & sketching. It's easy to use, and even has a history palette.
Impression does one thing only. It lets you add a watermark to your photos. Simple to use.
Do you like those ad photos that have the background in black and white and the main object in color that draws you in? Touch FX Lite will let you do that. The $1.99 full version has a bunch of filters that will allow you to apply just about every color variation possible to just a portion or all of your photo. Zoom in for fine control as you brush out your background color.
Want to create your own photo postcards? Check out Bill Atkinson PhotoCard Lite. Use your own photos to create a postcard, then either email it or, for a fee, have them professionally printed and mailed.
There are a bunch of free and inexpensive photo apps for the iPad. Now, none have the capabilities of PhotoShop, but they still can give you basic editing controls. Check them out. You're sure to find something you'll like.