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Two apps to check out.
Big Lens is currently free and offers a quick way to do depth of field effects as well as other filters. Great app.
Laminar Pro. Got this at the weekend and is best described as a mix between Photogene & Photoshop Touch. Potential to be the single best editing app on IOS although currently has a few issues with crashing and interface inconsistencies. Probably the closest to a desktop Photoshop clone. Definitely one to watch. Laminar Express is the free iPhone version which will give you a taster of what it can do, you just need to dig around in the interface. Offers great layer & mask support.
I've used Snapseed for a good long while. Photoforge, others but Leonardo is quite good with layers, gradations, selections, etc. Very PSish but of course dealing with jpegs instead of raw.
Editing of pics is always fun. For this great fun i think picasa is the best. But for iPad i think Painting 101 http://www.kdanmobile.com/en/painting101/index.html is one of the finest application. The canvas look of the application is very beautiful and easily adaptable.