The iPhone 4G is rumored to have a built in front camera embedded inside the touch screen so the other person on the line can see you as if you were talking face to face. Here is a mock up design of the iPhone 4G with the MacBook Air inspired asthetics.

iPhone 4G With Front Camera Multi-Way Video

The technical challenge for Apple and AT&T (the cellular carrier and possibly Verizon), however, is how they plan to support the 2 way video bandwidth on a 3G network.

AT&T recently announced that they are planning to double the speed of their 3G network so this multi-way video and audio conferencing on your iPhone may very well be true.

Thanks Rodolphe Desmare for the art.

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