The neat thing about working on a team that updates its product every 4-5 weeks is that every 4-5 weeks I get to have a new favorite feature. With yesterday evening's update to Popfly I had a bunch to choose from (Adam Nathan outlines many of them here) and I'm torn. We have an improved look and feel on the mashup editor (shown at the left), a dramatically improved projects page, and a better way of displaying help, as well as a few features that are kind of hidden in the product (let me know if you find them).
But I think my favorite is the support for creating full Facebook applications. We've been toying with what we call ".facebook" for a while -- ever since Facebook launched its JSON APIs, but with this iteration we made it so that you can not only publish to Facebook, but actually invite your friends to use the things you create using Popfly. It's still a little tricky since you need to do some things on both Popfly and Facebook and Popfly can't just make all the steps go away, but it's still pretty darned easy.