The very popular iPhone app, Tweetie by Atebits (the Loren Brichter's company) has been purchased by Twitter, the service it's a client for. Twitter decided to buy instead of recreate its own mobile client, so it settled on Tweetie. It rename the app to "Twitter for iPhone" and then make it free in the iTunes App Store.
Loren Brichter will join Twitter as a key member of their mobile team.
At the time of writing Tweetie is still available in the App Store for USD2.99. Given the above news I do not suggest anyone purchase it until Twitter takes over.
I spoke with the developer of Twitepad, and he said:
Development of Twitepad will still continue. Have to see how tweetie for iPad will look when it's out. On the iPad there are many ways to build Twitter clients so there still might be a market for 3rd party clients.
I guess time will tell.