Well thanks for the good answer. Hopefully it can capture video...only because it's pretty much a standard nowadays in cellular phones
Good question. They didn't really seem to touch on the capabilities of the camera at all or how it will be used in the iPhone; it does seem like there wouldn't be a specific reason it couldn't capture video though.
Video conferencing would be difficult though, since it doesn't seem like there is a camera on the face; I do recall that being one of the big rumors though, that one of the main "features" of Apple's phone would be video conferencing.
Perhaps also in a future rev.