Price: $4.99 (as of 3/18/13, marked down to $1.99)
Procreate by Savage Interactive Pty Ltd is an absolutely amazing paint app.
Procreate is a professional quality painting app for your iPad. This app is packed with more than 48 brushes that are customizable in nearly every imaginable way possible. Also at your disposal are the true-to-life pencils, inks, and paint brushes.
This app is super slick when it comes to painting. It is like having a real canvas right in front of you. Procreate uses a unique Silica engine to power the effects of each brush stroke which gives you a life-like simulation of ink and paint on canvas.
There are over 200 levels of undo and redo so that you can go back on any mistakes you make or redo anything you unintentionally undo. Canvas sizes are available all the way up to 4096 x 4096 or you can create custom canvas sizes if you like. Extra brushes can be purchased or created and then imported into the app meaning you could have an infinite number of brushes available for use.
Procreate was last updated to Version 1.7.1 on December 17, 2012 and included data migration bug fixes and numerous other tools and effects. There have been 297 reviews for this app with an average score of 4.5 out of five stars.
This is one of the most amazing paint apps I have had the pleasure of using. I would highly recommend a quality stylus for the delicate painting features. You really could create some amazing images with this app and all the effects it has to offer.