Will iPod Touch Camera Be Stellar — or So-So?

I've already accepted that the next iPod touch would have a camera. A few months ago, HardMac and iLounge both stated that new iPod touches and iPod Nanos would include cameras with iLounge even doing some mockups. Since then, I've discovered Apple job postings mentioning iPod cameras (in the title!) as well as "embedded video engineers".

Interestingly, today some more evidence piled up on the iPod camera heap. A few iPod case manufacturers have produced new iPod cases with holes for cameras.

This would seem to indicate that an iPod camera is fairly certain. It even has Forbes echoing "Apple is killing the camera" story - before the iPod camera is even announced.

But the interesting thing/show stopper for me is: What quality of camera will this be? If it is similar to the iPhone 3GS's 3 megapixel camera, I think it will be popular...but it isn't going to kill the point and click. The lenses and CCDs are much better on a $100 Canon camera and frankly, I want better pictures than the iPhone 3GS can deliver.

There have been some 5 Megapixel camera rumors around as well. If Apple can put a decent lens and some good hardware on the device, they just might upset the camera industry. Otherwise, they'll probably take a some marketshare away from the Flip and Xacti lines but leave the higher end point-and-shoots alone.

In other news, Apple is said to be putting a micro projector in some of its new products, iPhones and iPod touches seem like an interesting target for this type of device.