This post is being written on my iPhone using the WordPress iPhone app – which I would link to if it weren't such a hassle.
That is my major gripe about the app, and it's one that can't be stressed enough: writing HTML on the iPhone (on any phone, I imagine) is an exercise in frustration. I suppose if you are just dashing out a three-line post and have no need to link to any address you haven't memorized, this might be okay. For those of us that write more than a paragraph per post, this is slow, clunky, and annoying.
When I write in web-based WordPress, I have in-theme previews available to me. The app says it “can't retreive [my] theme” to show a proper preview. Web-based, I have multiple browser tabs in which to look up links, and all the power that being a Thesis user brings. I have none of that in ths app. Was I expecting any of that? Of course not. There is only so much you can squeeze into a smartphone screen and Automattic can only account for WordPress funtionality, not that of third-parties.
Image support? Not so much – only whatever is in your camera roll. Plugin support? Not at all. This app is basically good for a few things: writing short posts, managing comments, and making quick & small adjustments to existing posts and pages.
I think that it's a good start, and useful in a pinch, but I don't see this app getting a lot of use in it's current form.