A developer was messing around with some configuration files which fooled the 3.0 beta software for iPhone to think a video camera was present.  As we and others have posted, we have a pretty firm confirmation that video will be an option in the next iPhone.  The screenshot shows a switch between still or video capture and has an "auto-focus camera", "magnetometer" (digital compass), and "Voice Control".

 

This summer should show the release of the final 3.0 firmware along with new version(s) of hardware.

 

[Mac Rumors]