The free (with watermark or $4.99 without) app is called MagicPlan. You use your device to line up what you see through the camera on a grid that measures it. Or per the webpage: "MagicPlan is the only application that MEASURES, DRAWS and PUBLISHES an INTERACTIVE FLOOR PLAN on the web, just by taking pictures with your iPhone 4 or iPod Touch (4th generation)."
Gizmodo gives it a middling review and notes data is shared!!