Apple's iTunes Rewind shows us this year's top content on iTunes, as well as some top picks from iTunes staff.

Apple unveiled Thursday its top picks for the best apps and games of 2011, doling out prestigious honors to a handful of lucky developers.

The photo-sharing app Instagram took top marks for iPhone App of the Year, while the iPhone Game of the Year honor went to Tiny Tower, a luxury tower/real estate simulation. For iPad, the top app was Snapseed, a photo effects program, while Dead Space, a third-person sci-fi action adventure, took top game honors. These and other top picks are chosen by iTunes staff.

For app makers, earning one of these top spots is a nod to their quality and accomplishments, but primarily offers another means of exposure, as these apps are featured prominently on the iTunes App Store Rewind page.

“I’m thrilled for the Instagram team and community to have the opportunity to be recognized in such a way,” Instagram CEO Kevin Systrom said in a press release.

Instagram has more than 14 million registered users who’ve uploaded more than 400 million photos. The Instagram team has expanded from two to 10 employees over the past year, and they have “big plans for the future of the app.” Perhaps Instagram’s hotly anticipated, oft-rumored Android app will finally make an appearance.

The publisher of Tiny Tower, which Apple’s iTunes team chose as top game of the year, feels that its freemium model is a key part of why it has such a popular, successful product.

“We believe that Tiny Tower’s success has sprung from putting players first and giving them a fun and unique game that truly is free to play,” Ian Marsh, co-owner of NimbleBit, the company that built Tiny Tower, told Wired.com via email. “There is nothing in the game that you can only get by paying, and a lot of players really respect that.”

Apple’s Rewind 2011 section also features charts for most popular content among users. The top selling movie of the year (in terms of both sales and rentals) was The Social Network. On the bookish side of the iTunes aisle, Walter Isaacson’s Steve Jobs biography came in as the number one selling non-fiction book.

As far as iTunes music, Adele dominated the year, achieving the number one spot for top-selling song (Rolling in the Deep) and top-selling album (21). She also garnered the Artist of the Year title from iTunes.

For Apple’s full top 10 lists for each iTunes download category, hit up iTunes Rewind for yourself.