Ok, in case you all missed my post on another thread around here, this is what's happening at WWDC, but first, a disclaimer:
In no way am I affiliated with or employed by Apple internally and anything I post should be taken as pure speculation on my part.
1. Updated iPhone with 2.0 will be released before the WWDC. It wll NOT have GPS or Video camera but will have increased storage size (16GB and 32GB) and 3G of course. No special event is necessary for this.
Sorry to burst your bubble but the new iPhone WILL have a frontside camera.