Challenge: Learning everything from scratch as we had never used XCode before.
Execution: Calling it 'Faced', our app had users load photos from their phone or Facebook of their friends' faces and lovingly decorate them with zits, pimples, scars and wounds. Once they were done, users could upload their creation to Facebook or to Twitter tagging their friends. The intent was that by having your image defaced and tagged, that you would download the app to get revenge. To help keep everything friendly, all user interface graphics were hand-drawn. The UI was designed so that it could be used with a single hand.
The zits, pimples, etc. were designed to look as realistic as possible so that they would blend well with photos.
We launched our app in January of 2010 and managed to sell just over 2000 copies in about two months.