Update for Lightroom 2: none of the problems I outlined before have been addressed. No change in rating. I almost docked another star for the new "Auto-add Photos" setting thats *on by default* and immediately starts importing (and uploading) every single photo from your main photo library. Adobe, get a clue please. You need to ASK people before doing something like that. The new de-haze is a nice addition, but they really should have spent their time fixing the terrible UX/workflow instead.
The adjustments are good (not all the tools are there, but the ones it has are the same quality as the full LR). Unfortunately the UX and workflow are very poor. One example of many things they got wrong: the "hold three fingers" gesture for comparing before/after is awkward and terrible. Every other (decent) photo editing app uses a single finger for this. The edited state is also not cached properly, so every time you release this gesture it redraws the edited version — a jarring transition that completely defeats the purpose of this feature. This has a long way to go before it becomes a good photo editing tool. Right now this is a half baked preview of what might be, at best.
Honestly, Adobe should just study the editing tools in Instagram and follow their lead (seriously…Instagrams editing tools are among the best in any mobile app; its a shame you cant just export from it or Id use it for everything).
Stormchild about Adobe Photoshop Lightroom for iPhone, v2.0.0