I've been through A LOT of photo apps on WP7 & I personally have no affiliation with any of them. So I'll tell you straight up, a lot are garbage. But there are some that are really really great. My list:
- Pictures Lab (to me, its much better than Thumba for editing & the results are higher quality. But the Thumba Photo Editor is nice too)
- Apict (nice, simple app for that Polaroid look)
- Thumba Cam (for retro)
- Lo-Mob (started on iPhone & gets overlooked on WP7, but its high quality)
- Phototastic (newer, but really great way to make collages from a few photos with adjustable frames)
- Collage (another collage app, but good for putting tons of photos that you can manipulate in any way against nice backgrounds)