We’re fans of Echofon, but this should definitely shake things up. A lot of people already seem to prefer Tweetie, and if this acquisition results in shorter time between releases it could dominate even more. If they do things right this should always be the most “up-to-date” app because they’ll have pre-release access to all of Twitter’s newest features and have a head start straight out of the gate.

Twitter acquires Tweetie iPhone app, renaming it 'Twitter for iPhone'