The iPhone is a great device for checking, sending and replying to email. However, email from the iPhone can be a bit plain. There is no way to italicize words, you can't put things in bold, the list goes on.
MarkdownMail, a $1.99 App for iOS4 and up, uses a Markdown markup language developed by John Gruber of Daring Fireball.
The software converts Markdown into various text styles. For example puting a word in asterisks like *this* would cause that word to show up in italics. Doing double asterisks like **these** would make the word show up in a bold style. There are various other styles that can be accomplished, and they are included in an in-App guide that shows the user how to write in them.
The App's main function is to convert the email into HTML, so that it becomes readable in any browser or email service. Before sending out their email, users can check the preview to make sure it looks the way they want it.
Additional information via Macworld