Complicating or simplifying the decision this year (depending on your point of view) is the quality of the new iPhone 4's built in camera. The new iPhone 4's camera is now up to a respectable 5 megapixels in resolution. That is probably enough for most non-professional photographers.
According to the charts, you could print a true photo quality (300 pixels per inch) print up to 6"x9" from a 5 megapixel image. In reality, I've used Epson inkjet printers for years and gotten very good quality images at 150 pixels per inch. That would grant you a 12"x18" print from the same photo.
While too many people place the emphasis on megapixel count, the real issue is pixel quality. For example, a pro camera with a full image sensor like the Nikon D3 or D700 will always outperform a point-and-shoot with the same megapixel count. That's because the pro camera's pixels (sensors) are bigger than the point-and-shoot's pixels. Bigger is better - in every way that matters. They capture more of the information you need to create a digital photo.
Beginning iPhone 4 Application Development
Read the entire article at Examiner.com.