The application lets you view Reddit and sort stories as you usually do: by hotness, newness, top-score-ness (this is a word only in the Reddit universe) and controversy. The links open inside the application, where you can easily vote links up or down, as well as view comments without leaving the page.
A particularly interesting feature is the Serendipity mode, which lets you you browse random Reddit stories without clicking; simply shake the iPhone and you'll be served a brand new link.
Interestingly enough, the application is not free; it costs $1.99, and has no ads. An ad-supported, free version will be available at a later date. It's a slightly odd choice and probably a bit of an experiment by Reddit, whose owners perhaps want to see how loyal their userbase is. Either that, or they're desperate for cash (just kidding).
See how the application works in the video below, and get it from the App Store here.