These images were revealed on macrumors.com

This week, an image leaked out of an iPhone parts supplier that looks an awful lot like a new iPod Touch face. The face has two holes: the standard large hole for the home button, and a smaller hole on the other side of the screen that could possibly house a front-facing camera {Mac Rumors}.  This isn’t the first time we’ve seen leaked iPod Touches with new features.  Last year there was a model making the rounds that including a camera on the back of the device,  Tear-downs even revealed what could have been a spot on the board for a camera sensor.  Alas, we were given a mere iPod nano with a back-mounted VGA camera for shooting low-res video.

A front-facing camera is fine, but Steve Jobs made it very clear at the iPhone 4 announcement that FacTime works better than say Skype because it only requires a phone number, not a buddy list.  That seems to exclude the iPod Touch from getting in on the FaceTime action.  However, in the latest iOS beta, iOS 4.1 beta 3, a feature was added to allow Face Time with just an email address {Engadget}.  Presumably this is the work-around for iPod Touch owners.  It wouldn’t seem too limited since Face Time can only be done over WiFi at the moment, anyway.  Plus, it will allow those who want an iPhone 4 for FaceTime, but don’t want to switch carriers, or who don’t want to buy a smartphone, to finally use FaceTime.  They will likely still need an email address, however, which means we’ll all have to walk grandma through setting up a Gmail account.

Now come concerns about privacy when using Face Time – the video chat application, and exactly how much AT&T and Apple know about you. According to an anonymous Apple employee, iOS4 means that if you were hoping to jailbreak your phone to run unauthorized apps, you’ll have to do it every week. Network updates are delivered over the air (OTA), and let both AT&T and Apple know if you’ve tried to unlock your phone. If you have? No customer service for you, and count on being locked out every 1-2 weeks if AT&T isn’t your carrier.

Early iPhone 4 recipients were the guinea pigs to test the updates, and ensure that the rush of users activating the phone didn’t bring down the OTA update system. Guess they’ve learned something from the pre-order debacle.

The issue that may cause users the most concern, however, are the unencrypted updates sent to Apple about who users are talking to and where they are.

“I will let you off with one last bit of information if your gonna write a story on this and that is Facetime, the iPhone 4 to iPhone 4 Wifi video connecting. The issue is with Wifi is that anyone can get on a Wifi Signal and potentially see what the viewers and broadcasters are looking at without them know, now Apple will deny this and say its not our problem you where not on a secure connection, in my mind I think that its all bullshit.

People should be able to have some type of security during those calls. Worst yet is once a person connects to another person on FaceTime it for some reason non of us in the office can figure out, sends us APPLE a message and says those two people are connecting via Facetime and gives out their location to us. So for whatever reason we need that information just blows my mind. As a consumer why would you need to let Apple know that you are connecting with a person via FaceTime, its non of Appleâ€s business.” {Addictive Tips}

Now to play devil’s advocate, there are some valid reasons for monitoring usage of the FaceTime service. It could be to help law enforcement, in the event that the information is needed to track down a criminal, it could be for less noble business purposes of monitoring usage at a geographic level.

But whatever the good reasons, it raises concern over the just plain creepy prospect of Apple spying on your calls. According to the Addictive Tips source, many Apple employees are passing on an upgrade to iOS4 over the concerns.

Then there’s the issue of the oversharers. Location based social networking has safety issues and oversharing on video chat might be cause for concern here as well. Now the Apple employee didn’t say that Apple can actually see or store the content of video chats (and for all of the issues that surround storing that data, we don’t think it’s likely they’d try); but for teens who already send “sexts” (sexually charged text messages and photos), could sex videos be next? While oversharing isn’t limited to the young, and the prospect of dirty video chat likely won’t be either, the unencrypted wi-fi connection means that the person on the other end of your chat may not be the only one to see what you send. {SFGate}

Keep it clean, Big Brother is watching.