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Do you mean something like this?

IncrediBooth

http://incredibooth.com/

It's 99 cents on the iTunes/App store. LOVE THIS APP~ It's very much like the photobooths you see in the mall, it takes up to four pictures and creates it into a little strip of photos too. You can save it on your library or send it to some friends/family. I admit I'm obsessed with this app. I just need to figure out how to change the color on that site.

Other camera apps I recommend is Pudding Camera. The language is in Korean though, but very easy to use. the pictures below are from said app. Love it. It has loads of different cameras effects (Basic, Vintage, Motion, etc) and you can change the picture quality too. I think it's FREE on the App Store right now. IMO it's worth getting them both, if you don't like the default camera. Definitely two of my most favorite camera apps on the iPhone.
 
Do you mean something like this?

IncrediBooth

...

Other camera apps I recommend is Pudding Camera.

...

Camera FX! is a different kind of app that works pretty much like the Apple OS X Photo Booth application. It applies realtime effects to the camera preview so you can see what you're photo is going to look like as you are taking it.
As far as I can tell, most photo effect apps (Incredibooth, Pudding Camera, Hipstamatic, etc.) apply the effect only after the photo is taken so you can't see the result until after you've taken the photo.
The best way to see how Camera FX! is different is to view the short YouTube video demo of the app:
http://www.youtube.com/watch?v=OzsZZQ7y_OU

BTW promo codes for Camera FX! and other apps are available here:

http://iphoneapp-promocodes.com/appinfo-1325.html
 
Picture resolution

I downloaded the Camera FX and noticed one big problem - the pictures taken on my 3GS are all in low resolution it has 480 × 640 pixels. I hated that, so I downloaded Mobits Cam, it has fewer effects than Camera FX and the photos take longer to be processed but they are in 1536 × 2048 pixels. Much Better!
 
Front Camera

Can you switch to the front camera? If you cant then that defeats the purpose of "photobooth" on the iphone.

Mobits Cam can take pictures with the front camera on the iPhone 4 and also implements the "Big Button" feature to make it easer to take pictures of yourself in the 3G and 3GS.

We are also implementing sharing with twitter and facebook for future versions.
 
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