It depends a lot on what you want to do with it, and hence what your criteria are for "best", but I've used a few so here are my opinions:

Photoshop Express: 2/5

[US link] Free, nice interface and easy to use, but features are limited to basic corrections, effects and frames. Sharing to other services is very poor: just Facebook and a Photoshop Express online service.

Snapseed: 4/5

[US link] This one costs a bit (£2.99 in the UK, although that gets you the iPhone version too) but has a lot more features than Photoshop Express. The interface is nice again, especially the little pop-up menus that appear when you use the editing tools. (I know that sounds odd but use it and you'll see exactly what I mean: it's very slick.) It also has automatic localised adjustments a bit like the ones found in Nik Software's Silver Efex Pro and other tools. (Nik make Snapseed too.) On top of that it's got lots of built-in effects filters, most of them customisable: for effects it's probably the best app on the iPad. And sharing is better than Photoshop Express: it supports e-mail, Facebook and Flickr.

On the downside, I'd love it to include a few more features that I use often (such as white balance and vignettes) and offer sharing to other services (like Twitter). Plus the price tag is definitely off-putting.

Photogene: 4/5

[US link] I first saw this described as "Lightroom for the iPad" and it's certainly loaded with features, with the emphasis much more on serious editing than effects. It's got all the editing controls you'd expect in a desktop app (white balance, exposure, contrast, curves, channels, histogram, sharpening...). Amazingly, it also has retouching tools like a heal/clone and dodge/burn brushes! There really is a lot in there, and it'll share pictures with most of the online services out there (Flickr, Facebook, Twitter, Dropbox, Picasa, etc.)

However, it's let down by an unappealing UI and the fun features (speech bubbles and effects filters) are disappointingly basic and unevolved. It's also an iPad-only product so you don't get to share the love with your iPhone.

Luminance: 3/5

[US link] Like a better Photoshop Express: it's all about effects, and has a fantastic set of filter presets, almost up to Instagram standards. It also has a decent set of editing tools (white balance, split toning, hue/saturation, brightness, contrast and vignetting) but bizarrely no crop or rotate (unless they're really hard to find). So it's another creative rather than corrective app, but again it's Universal so you get two apps (iPad + iPhone) for the (small) price of one.

PhotoForge2: 5/5

[US link] Only discovered this one recently and it's definitely The One! It has a stunning array of corrective features (including, but by no means limited to: white balance, levels, curves, channel mixer, colour balance, noise reduction, unsharp mask... the list goes on and on), as well as some nice auto-adjustment features. On top of that it has a good set of effects filters... and a Lightroom-style edit history... and layers. Yes, layers. It supports sharing to a huge range of online services (including Flickr, Facebook, Twitter/TwitPic, PicasaWeb, Tumblr and FTP). And best of all, all of this is presented in a really beautiful UI with a nice Mac OS dock-style effect on the menus. At the bargain price of £0.69 (UK) for a Universal iPad/iPhone app, it's a clear winner in my book. Definitely worth having.