Eye-Fi is known for their WiFi-enabled SD flash storage cards that can transmit photos and videos directly from digital cameras to a computer or web photo service. Their free iPhone app (Eye-Fi card and account required to use the app) was updated last week.
Eye-Fi 1.1.9 (iTunes App Store)
The one thing the app does not do is let you copy a photo directly from a digital camera with an Eye-Fi card to an iPhone or iPad. The app only works on iOS 4 devices and lets you copy files over WiFi from your iPhone to your desktop or notebook computer. You can also use the app to upload photos from the iPhone to a variety of web photo storage services over WiFi or 3G.
Comments in the App Store indicates that this updates fixes a number of issues. But, a few commenters note that they are still experiencing functional issues.