• As expected, there’s now a front camera for video chat, and the 5-megapixel back camera now has an LED flash. Apple’s Face Time lets you switch between the cameras at the touch of a button.
• The screen now features a high resolution display that doubles the pixels in each direction (960 x 640) for a pixel count four times higher than previous models. Apple calls it a “Retina Display,”and claims that words and images are so sharp now that the human eye can’t distinguish individual pixels.
• Now with more power! The new iPhone runs on the same A4 processor that runs the iPad, which requires…
• More battery! The battery is a bit larger to handle all of the upgrades, which also bumps up the talk and browsing time. Compared to the previous version, the iPhone has 7 hours of 3G talk, 14 hours 2G (previously 6 and 12 hours respectively). Internet usage is up to 6 hours of 3G browsing, 10 hours on WiFi (before, 5 and 9 hours respectively). And if you just want to keep things simple with a song or two, you can now get 40 hours of music play out of the new iPhone compared to the 30 hours of the previous device.
• As far as apps go, the iOS4 (iPhone Operating System 4) lets developers tap into the new high resolution display, the new gyroscope, and a new “Core Motion” API to make the iFart applications spin in any direction imaginable. We’re sure someone will find a better use for the motion technology.
• iBooks will also be coming to the iPhone, and while Apple doesn’t think much of Flash, they are offering native PDF support, which should please people who already have ebooks or reading material in that format.

Unfortunately, you’re all still stuck with AT&T, their increased fees and new metered data plans. The phone will be available in white or black, retailing at $199 for the 16GB model and $299 for 32GB. The 3GS will only be available from Apple and AT&T in the 8GB storage size, and will be dropped to $99. The 16GB $97 Wal-Mart iPhone suddenly looks like a slightly better deal. The 3G meanwhile, will disappear completely.

Pre-orders start on June 15th, with 5 countries at launch (US, France, Germany, UK, Japan) and 18 more to follow in July.

"A friend of a friend went to a bar, and all I got was a lousy police raid"

Gizmodo received heavy media coverage for publishing photos and specifications of an unreleased iPhone prototype, but some – including Apple, have questioned the legality of how the company came into possession of the top-secret device. According to Gizmodo accounts, the phone was left in a bar by Gray Powell, an Apple employee out celebrating his 27th birthday. {Gizmodo}

Powell left the iPhone prototype at the bar where he’d been drinking, and someone who’d been sitting next to him eventually ended up with the phone. Despite a few phone calls and emails to Apple, no one returned the inquiries about how to return the device. A few weeks later, with no word from Apple, the person who found it sold it to Gizmodo for $5000.

In California, buying stolen property is a crime, but that’s where things get a bit fuzzy. If the person at the bar who found Powell’s phone had indeed made efforts to return it to Apple, did he actually steal it? Further, if his account is accurate, could it be considered stolen property if the owner never responded to attempts to return it?

Apparently Apple, who is notorious for secretive testing and release practices that make the military look chatty, thinks so.

So last Friday, San Mateo police armed with a search warrant broke down Chen’s door while he was at dinner with his wife and seized business cards, 3 MacBooks, 2 digital cameras, 1 Dell desktop, an IBM Thinkpad, 2 external hard drives,  a Motorola phone, an iPhone, an iPad and a server.

Our first thought is that Chen would be a really good friend to have if you ever needed to use a computer, but a close second is that in addition to seeming pretty heavy handed, it doesn’t seem legal unless there’s some indication that the person who found the phone in the first place didn’t make an effort to return it to Apple. Additionally, there are questions surrounding the legality of seizing the items from a journalist, since the investigation seems to focus on revealing more information on the source who sold the lost iPhone.

We’re guessing this means Gizmodo is officially off of the Apple press preview list.