This past weekend, Adobe released a new updated version of Adobe Photoshop Touch. The latest version, 1.2, would let you increase the resolution to 2028 X 2048.
You should note that you must allow that in settings or it would default to the standard 1600 X 1600.
That is an improvement, but still falls short of even the iPhone 4 resolution (2592 X 1936), the iPhone 4S camera (3264 X 2448) and of course the New iPad resolution of 2048 X 1536 at a dense 264 pixels per inch.
There are some other awesome features, including Creative Cloud auto-sync, and new special effects, including the ability to render in a pseudo HDR look. You can also now export to PSD or PNG formats via email, or from the camera roll. The new update also sports improved rotate and flip workflow and the option to transfer images to your desktop via iTunes.
iPhoto for iOS also downsizes imported images, unless they are being imported through the Camera Connection Kit. Used that way, iPhoto for iOS supports images up to 19 Mega Pixels.
This latest version of Photoshop Touch may not completely exploit the New iPad retina display but it is a step in the right direction. The update is free to current owners. The app requires an iPad 2 or greater, and iOS 5 or greater version.