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Camera+ is excellent. Snapseed is good for editing, as is Filterstorm. Neither allow you to draw on a photo, however. Somebody else will have to suggest an app for that. I have no idea.
Is FilterStorm, that one is good. Photogene is also good. Snapseed is ok too. Filterstorm has the most for your money, it is $3.99 and works on the iPad as well. Filterstorm's interface is neat and easy to use. you will like it especially if you have photo processing experience.
I just used Filterstorm to airbrush out some stuff on a picture. It's not very intuitive, but it got the job done.
Before
After
I took the screenshot, cropped the pic, edited it, uploaded to Dropbox and linked it to this post all from the iPad. The PC-less future is almost here...