A friend of mine who works for Apple gave me the scoop on the iPhone 3G about 1 1/2 months before SJ announced it. He was correct in telling me about the current release specs. He tells me now that there will most likely be a new iPhone released (announced) at Macworld in January. He claims that the January releases will be the major upgrade with the July update being incremental. He also told me that from now on, I should get on the January release cycle, not the July cycle.
Allegedly, SJ wanted this most recent update to be a much more major one, but logistics wouldn't allow. Therefore Apple slapped a couple of new chips in the old motherboard and, viola, iPhone 3G. This was just to satisfy the immediate needs for an iPhone with 3G technology.
The January update will be a completely redesigned motherboard that will integrate much more technology, even more efficiently. THIS is the one that most likely will have the front facing camera for video-conferencing, etc. Unfortunately, those of us like me who just upgraded to iPhone 3G may not be eligible for the subsidized pricing at that point. I will upgrade to this one anyway and stick to the January cycle from there on out.