If you use your iPhone for sending and receiving e-mails on Gmail, you know that both the built-in e-mail client and Gmail's own iPhone app leave a lot to be desired. For this reason I have been a long-time user of <a href="http://sparrowmailapp.com/" target="_blank">Sparrow</a>. The beauty of Sparrow is that it does Gmail better than Gmail does. It's fast to load, has support for labels, archiving, unified inbox, multiple accounts, sending photos directly from the e-mail app, and more. In addition to a great iPhone experience, the company has a solid Mac client that works in the same way.
The terms of the acquisition have not been made public, but so far Sparrow is saying that they've "been acquired", and are "joining the Gmail team to accomplish a bigger vision — one that we think we can better achieve with Google."
The only downside to an acquisition like this is that the Sparrow app, as we know it, will no longer be improved. The team has said that they will only release maintenance releases, so no new functionality. That said, hopefully the Gmail app for iPhone starts to see some of Sparrow's influence in short order, not to mention that maybe we'll get a fully native Gmail client on Mac now, too.