Microsoft should put a camera at the TOP of their device so that users don't take pictures of their index fingers. Better yet, one that takes photos in addition to videos. Those are easy wins for Microsoft!!
Seriously, there's no point in a product like this that is generally held vertically to have a camera placed there. I also don't personally think that a camera on a PMP is all that necessary. A phone, yes. You always have that with you. A PMP? Just "nice to have"...maybe. If you look at the demos, it really appears to be a gimmick. Look at the video effects that must be pre-selected prior to recording and are permanently recorded onto the original video. Dumb. Obviously meant for teenagers--who'll already have phones, so???
LP? Again, gimmicky to me. I wonder if you can add your own content? Also, will the extras be DRM'ed. Otherwise, they'll be available within minutes on the net.
iPod touch, definitely a disappointment. In fact, the whole show would have to be labeled as such. Good to see Steve "vertical," but otherwise a waste of 50 F5-presses on a live blog.