Mark Hendrickson comes to that conclusion in The State of Location-Based Social Networking On The iPhone. Among the things that need to be enhanced: location updates in the background (Apple does not allow this yet), stability, ability to invite friends knowing they are supported handsets.
There’s a round up of the six most popular apps including Moximity which headed to private beta last week. One differentiator: it’s launching in one geography at a time. First up: hometown of Austin, TX. Also unique: the app pulls in your contacts from Facebook who are also on the service. There’s more coverage of the company in its local paper.