There's plenty of hot air coming from the 3GSM exhibition in Barcelona, and there is no doubt that video over the handset will be a reality in the near future. But for now, why oh why can't we concentrate on getting voice signals that work before going after incremental services that drive the mobile operators' ARPU.
More powerful handsets are clearly needed if any of the current apps are to be useful day-to-day (yes, you can get Sling and Skype to work, but expect to have to reboot your phone afterward); and, of course, more bandwidth.
My money is still on a new generation of phones based on a new IP based transport protocol that doesn't currently exist. Retrofitting 3G was bad enough and is still far from being a reality. Circuit switched is still the way to go over current mobile carrier services, but I wouldn't be at all surprised to see Intel, Microsoft and even Apple launch WiMax phones over the coming few years.