The new iOS 5 enables some basic photo editing features in the built-in Photos app. It can rotate, enhance (kind of like "I am feeling lucky in Picasa), red-eye and Crop.
The first three are pretty easy to use. However, the straighten feature in crop takes a little practice. It's a lot easier to use a mouse to that than using finger on an iPad. The difference on an iPad seems to be I need to think about moving the image, not the grid. To turn the image, hold one finger on the center of the turn, and then use another finger to turn the image. If you use your thumb and finger on one hand to turn, that seems to be not as accurate.