The iTunes App Store offers H&R Block At Home 1040EZ 2011 for iPhone / iPod touch for free. That's the best deal we've seen for tax preperation and filing app. It includes free filing of both federal 1040EZ and state returns via the app.

Of note, The iTunes App Store also offers H&R Block At Home for iPad for free. It features free filing of your federal return via the app. (State returns are not free.)