Terminology is by far my favorite dictionary app for many reasons. It’s not just a dictionary — it’s also a thesaurus, with the functions nicely integrated into a great interface.
It integrates perfectly with Instapaper: install both, and Instapaper’s dictionary popovers will offer a link to look up any word in Terminology. Tap that link and Terminology will open with that word’s definition, offering a convenient button to switch back to Instapaper and continue reading.
And the developer’s just a really nice guy.