These both have great effects and filters, recreating effects from old analog cameras and films that are either discontinued or just not widely used anymore. Hipstamatic in particular is specifically designed to recreate the effects of the cult camera from decades past, with different "camera" and "film" options within the app to create different effects. Instagram gives you a wide array of filters to apply to your square photos, and I found an interesting diagram in a Photoweekly enewsletter that shows how you can get the same effects with analog cameras and films. (Feel free to check that out here at Photoweeklyonline). Instagram also makes it easy to upload photos to social networking sites such as Facebook and Twitter, but you are required to go through these steps for posting your pictures, and images do not automatically save to your phone. This can become rather annoying when you don't want to publicly share every image you take. Perhaps there is a way around this part of Instagram, but I have yet to find it. I'm much more partial to the Hipstamatic app, and generally prefer its effects and how it automatically saves to my phone's Photo folder. And you don't have to do too much running around to publicly post Hipstamatic images either, the app makes it pretty easy to do that too.
Well, whatever your preference, here are some of my Hipstamatic images. If you don't already follow my Facebook fan page or twitter, you can stay updated with a lot of my iPhone photos there!