The rumor mill is filled with the prospect of the next gen iPod Touch having a camera and microphone. We’ve heard these rumors before and truly HOPE they come to pass. As a CNET post notes…

A well-connected source tells us those rumors are on the money, and that Apple’s factories in China are already manufacturing iPod Touch models with integrated cameras and microphones.

I mean, just think about the possibilities. The additional of a camera on the touch would bring the awesome imaging power those of us with an iPhone 3GS already enjoy to a much wider market. That alone would be amazing. And if, by some small chance it included a 5MP camera instead of the current 3MP on the iPhone 3GS… wow!

The possibility of a built-in microphone is even more intriguing as it would be a huge threat to the telecoms since so many of us have WiFi at work and home. Well, it would be a threat if it weren’t for two small problems.

The first problem is the VOiP clients themselves. I’ve tried Skype, Fring and Truphone on my Touch and iPhone 3GS and have issues with each. Skype would be my hands-down choice for making calls over WiFi if it weren;t for one ting… even on the iPhone with its powerful processor it is a terrible experience. the app is slow to launch, slower to move from one screen to the next and locks up all the time. Fring has never been a good experience. Truphone works well. It is quick to load, fast to use and the call quality is superb. It, however, suffers from a second issue…

Thanks to Apple’s continued refusal to allow even one or two apps to run in the background Truphone is GREAT for outbound calls but not useful for inbound calls. Sure, the current iPhone version of the app makes use of Apple’s push notifications but that isn’t a great option if you really want to use an iPhone or Touch as a WiFi phone.

Give us a microphone, the ability to run apps in the background and a better iPhone VOiP client, however and the Touch might well become the biggest threat to telecoms yet. Oh, and if it jumped to 64GB of storage we wouldn’t mind either!