iCamera has been released for the iPhone. It lets you turn photos
taken with the device’s built-in camera into entertaining artwork.
It’s available for US$1.99 at the Apple App Store

iCamera lets you add photo frame effects and edit all your existing
iPhone photos in galleries. You select the photo frame you prefer,
and then take iPhone photos with the frame effect as usual. Also, you
can select any photos stored in iPhone library to add suitable frames
on them.

All photos will be saved to your iPhone library finally. iCamera
offers 30-plus photo frames for different occasions.