I'm actually waiting for an iPad with a front facing camera. Not exactly for FaceTime but for skype and other IM apps. That would be a useful gadget for me 🙄
I dont think you're right there, as FaceTime appears to use the whole iPhone 4 screen the video stream is going to be of a resolution that will use 2/3 of the iPad screen, in fact video of that quality will easily upscale to full screen and still look quite good. Its better then SD, if just slightly lower than 720p HD.