Yes, the camera is a SonyEricsson S700i phone. I work at a mobile operator and get to play with pre-release stuff when I can get them away from my staff.
It is a superb phone - the Sony influence is really showing now. Build quality is excellent. The camera software is very similar to that on a Sony digital camera.
Whilst the pics are pretty good, and it has a 1.3megapixel sensor, the lens lets things down, with blurring and strange colour effects around the edges of the pictures. Also, I think it is a CMOS chip rather than a more sophisticated CCD, but hey, I can make calls from it as well.
A really lovely bit of kit though. You really can use it as a camera so I rarely carry my "proper" digital camera with me unless I'm going to be doing quality photography.
Expect loads of 1.3mp cameraphones in the shops for xmas, and 2, 3 and even 4mp cameraphones in the coming 12 months.