The app in question is called SpaceLab for iOS (opens iTunes) and might be used in future space missions for some navigation tasks. However, the company notes that on the shuttle mission, the iPhones will not be used for critical navigation. There will be four experiments done with the iPhone and the instructions for the experiments are integrated into the app.
The experiments will include a “limb tracker” that looks at the Earth’s limb (or curved edge) to determine the altitude of the iPhone. A sensor calibration tool will be tested that allows of the calibration of the sensors and gyroscope of the iPhone in space. The app will also be tested to determine latitude and longitude based on photos of the Earth and to test the effects of space radiation on the iPhone RAM.