Even though much ado has been made about the high quality of the iPhone 4's camera, when it comes down to it, it's still a point-and-shoot. As such, photos taken with it tend to have a fairly deep depth-of-field - that's nice for getting as many things in focus as possible, but not great for getting those fuzzy-background professional-looking portraits and artsy shots. One solution is to use something like the iPhone SLR Mount, which lets you use SLR lenses on your smartphone's camera. A much less costly alternative, however, is to use Reallusion's Big Lens app.
To use the app, you start by taking a photo as per normal, focusing on the main subject. Once it's been taken, you then select the part of the shot that you want to stay in focus. This is done on the touchscreen, and can be accomplished by completely finger-brushing over the subject, using a lasso tool to define its outlines, or using a pinch-and-pan function to center a matching geometric shape over top of it.
Once the subject is defined, you apply the app's Smart-focus, which automatically blurs out all the other parts of the picture. If the background is too soft, or not soft enough, you can change it by adjusting the simulated aperture of the shot - on manually-adjustable cameras, larger apertures result in a shallower depth of field, which means fuzzier backgrounds. Should you be into overkill, you can also select one of nine virtual lenses, that render fuzzed-out background light points into geometric shapes such as stars or hearts.
If you can't wait to get the image into Photoshop, the app additionally includes 18 filters that allow you to adjust qualities like color and contrast, or to apply artistic effects. You can also use the Instant Focus and Blur tools to tweak the focus - both of the main subject and the background - as desired.
Big Lens is available on iTunes, for the standard 99 cents US. The video below shows more examples of what it can do.