First off here is the camera from the Nano: The nano camera is 3mm thick. Sounds thin, but when put into the cramped iPhone case, it caused something to change around it. Maybe Apple has an even thinner camera to use now, but I'm actually thinking they will use the nano camera? why not, they probably get them for pennies, and they record good video. I am very very excited to see a chat camera, but kinda like adding video to the 3gs I was very very excited to have that feature, but I rarely use it. But It is very nice to know its available. Maybe Apple can single handedly making wide use of cell video chat real. What the front facing camera caused: The relocation of the sim tray. It had no where else to go. NEW iSight camera NEW larger rear camera NEW Rear flash NEW second mic for noise cancellation Proximity sensor Ambient light sensor Phone speaker Silent/mute switch Sleep/Wake button Headphone jack ?? Bluetooth/Wi-fi Chip (sits right behind the sim tray on the current iPhone)(it may have moved also) Now realize this, All of those components mentioned in the list are stuffed in the top fifth of the phone. Now add Battery below those components is Larger. The phone is ~2mm thinner than the 3gs Apple had absolutely no choice but to move the sim tray. I personally dislike the location of the sim tray, but It had to happen. The use of micro sim was a smart move by Apple. Why on earth would apple use anything larger than it had to. Considering the use in the iPad this move just makes sense. I actually find it amazing how much stuff is in the top business end of this phone.