After reading all the awful reviews, I was a little nervous about this app. But since it was free, I downloaded it anyway.
I use it as a compass on my iPhone 4 for when I am driving. I have too much magnetic interference in the car to allow me to use a magnetic compass. When driving, the compass does exactly what it is supposed to do, and tells you which direction you are driving in as determined by your movement and GPS.
No complaints. Works fine. No-frills. There is a paid version that has some more features, but the free version does what it is supposed to do.
shrimppesto about Digital Compass FREE, v1.1.1