if the next gen iPhone has a front LED for notifications, I welcome it with open arms. A LED notifier is literally the only thing i miss about my old blackberry. Setting different colors or flash patterns for different alerts/contacts... it was great. iPhone kills that old thing in every other way, but I do seriously miss that LED.
I can't see myself using the current camera flash as a notifier light. If the phone isn't in my pocket, it's probably sitting face up on the desk or table. But it's nice to see they are at least opening up to the idea.
I have to admit I was shocked today. Integrated reader in safari, to-do list, the LED notifier, using the volume button for the camera..... things that have been around on other phones forever but I honestly never thought us iPhone users would get this stuff without jailbreaking or installing 3rd party apps. Apple is really starting to loosen up a bit.