Free Apps for iPhone/iPodTouch 4G (or apps with lite version) that allow you...

...to do the following things? I need an app for my iPod Touch 4G that is free (or has lite version available) that has the following functions on it:
* Can make fonts italic, bold, underlined, coloured and highlighted (colour & highlight is not important, but italic and bold is VERY important)
* Can paste/upload pictures on to it

Thanks x