The goal on the Pixon 12 is to equal or better the quality from a dedicated point and shoot. Like I said before, the lens retracts back into the phone body like a normal point and shoot camera. Touch focus, facial recognition, shoot on smile and all the goodies.
It also has a xenon flash, and rumored to have a 800x400 AMOLED display.
I wish it ran WinMobile, but they'll probably put out a version that does.
No details on size, but from the photos it looks about the same size as my Omnia, which itself is slightly smaller than the iPhone. So, small and slim with a real lens can be done.
Unfortunately like all the cool devices it'll be in Europe for months on end before it makes it's way here.