tvcatchup is cool Imy, live tv (well, 30 second delay) and mostly freeview channels. Just punch in iphone.tvcatchup.com into safari, then press the + icon then "Add to home screen". Doesn't work on 3G though.
Do you have sky? If so, get Sky+, you can set your box to record form it, pretty handy if you are out and about.
And, of course, iplayer, again, doesn't work on 3G!
As for paid-for-apps, I've not paid for an app yet