Most of my faves have been mentioned here, but I'll continue the list.
Intelliscreen ( I can't live without this on a daily basis--I love it)
PDANet (Free tethering over 3G network-Truly awesome app)
Other fun ones:
Twitterfon ( A Twitter interface)
Diamond Hunter (SWEET game)
Lux Touch (Risk!)
Phase 10 (The classic game)
Koi Pond (If my 1 year old nephew is grumpy this works every time, plus, it is just an amazing use of the iphone graphics capability)
Ocarina (Think Zelda music)
Nightstand (Awesome digital clock)
Snapture & Cycorder (Why didn't the iphone have this capability from the get go?)
I need to work for Apple/AT&T--I've converted so many people over to the iPhone it isn't even funny.
Great thread Yuri.