Sharp-eyed observers have noticed what looks to be an iSight camera in the iPad Steve Jobs used in last week’s keynote.

Even though Jobs didn’t talk about a camera, and it’s not mentioned in Apple’s official tech specs, something that looks like an iSight camera can be seen when Jobs first holds the iPad up for everyone to see.

As he holds it up, the light catches the iPad’s surface, illuminating something underneath. That something looks like an iSight camera, similar to the ones built into MacBooks, under the screens.

In the official iPad podcast, it can be seen around the 1:23:40 mark.

It’s not conclusive, of course, but corroborates the prototype images published by Engadget in the run up to the event, which clearly show an iSight camera in the same position. And references to a camera have been found in both the iPad’s Address Book software and the iPad firmware.

The absence of a camera on the iPad has been one of the device’s most puzzling omissions. Although, as our own John Brownlee first noted, a camera in a tablet that’s sitting in your lap, staring up at you, doesn’t produce the most flattering camera angles.

UPDATE: A repair company called Mission Repair says the iPad’s frame clearly shows an empty spot for an iSight camera, and it is exactly the same size and shape as the iSight slot in a MacBook’s screen frame. (Mission Repair received a shipment of iPad parts on Monday, the company blog says).

Thanks NyxoLyno.

Apple has just released iTunes 9.0.3, which looks like mostly bug fixes a big upgrade with a new look, among other things. Full details of the big, fat 100MB upgrade after the jump.

And now for something completely different.

I’ll admit, the first alarming thought that shot through my head when I stumbled across this vidclip on YouTube of Cult jefe Leander Kahney, was that he’d created it as fun-yet-terror-inducing way of emphasizing the “dead” part of the word “deadline” to Cult staff.

Turns out it was actually created by app developer Toga Pit — btw, cute marketing there, guys — to promote their new, maniacal-laughter-inducing iTouchMyFriends app, which turns images of your friends into manipulatable puppets. Just the evilness of the name ran shivers of anticipatory pleasure down my spine as I secured a copy to explore. I wasn’t disappointed.

We kick-off another week of deals with the Philips iPod docking speakers system. The system includes an FM presets, two 2-watt speakers, USB connection and an aux input. We also feature a new batch of free apps from Apple’s App Store, including Zenflation, a balloon flying game. We wrap up our top three offers with Process 3 for Mac, an idea and project organization tool.

As always, for details on these and many more bargains, check out CoM’s “Daily Deals” page after the jump.

Of all the criticism being leveled at the iPad — no multitasking, poor text input, lack of 23rd century Federation replicator technology — I’ve yet to hear anyone complain about the attractive $499 entry-level price. But just in case you aren’t convinced that the iPad is ridiculously, absurdly cheap for its feature set, behold, the inevitable infographic, put together by Darren Beckett.

There’s criticisms to be leveled at the Infographic — it ignores, for example, comparisons to various Android and Intel Atom based tablets in favor of attacking e-readers — but it still gets the point across: the iPad beats the competition, spec for spec, at the cost of a very slight price premium. In fact, in direct comparison, only the Barnes & Noble Nook seems to be appropriately priced in comparison.

For what it does, the iPad is simply the cheapest tablet out there. Don’t expect a mere infographic to finally put to rest the inexorably critical mutterings of the so-called “Apple Tax,” though.

Although it’s hardly as killer a feature as carrier unlock, one of the main reasons I still jailbreak my iPhone is so I can cram five icons into the dock… so when the iPad was first demonstrated, and showed only four available icons in the dock, I actually winced.

No need to fear, though, because this time, Apple has us all covered: a reader wrote into TUAW and pointed out that the iPad SDK allows up to six icons in the dock.

You might assume the iPad supports this behavior because of the larger screen, but the iPhone crams five icons into the dock just fine. I’ve always assumed, in fact, that the iPhone only allows four icons so that each dock’s icons is symmetrical with the columns of icons above.

I wonder two things: will the iPad, then, allow up to six icons per row, to make everything symmetrical with the dock? Finally, will the next iPhone update expand the dock similarly? Fingers crossed on both accounts.

Amazon has raised the white flag in the first skirmish over ebook pricing. The victors in this first round could be publisher Macmillan and rival ebook-reader maker Apple. After temporarily stopping selling Macmillan titles over a pricing dispute, the online book-seller said it was capitulating to the publisher’s demands.

“We will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books,” Amazon announced on its Kindle Community forums.

We close out a jam-packed week with some familiar deals for Mac fans. We have an iMac with the i5 processor (2.66GHz), a 27-inch screen, 8GB of RAM and Windows 7 – all for $2,207. The iLife ’09 home productivity suite from Apple could be a big hit for new iPad owners, or any Mac owner. Today’s deal is hard to beat: just $38. Finally, who doesn’t like free? We round out our top three deals with a new bevy of App Store freebies, including Super Slyder, a puzzle game that puts to use the iPhone’s accelerometer.

Along the way, we also look at other gadgets, including a way to keep your laptop cool, an easy way to get digital video and a colorful way to kick back and check out a screen wider than what’s in your hand.

As usual, details on these and many other bargains, can be found at CoM’s “Daily Deals” page right after the jump.

Soon after the iPad was introduced, one of the earliest complaints was that readers don’t want apps and other accessories interfering with the words. Now comes a university study showing people need more than reading to fall in love with e-readers.

Indeed, the Univ. of Georgia study found younger consumers may prefer their phone to an e-reader. According to the research, young people view Amazon’s Kindle as “old” compared to smartphones with applications allowing them to do everything from listen to music to finding a restaurant, along with reading online.

Apple has often dismissed the possibility the company should compete with low-cost netbook computers, saying the popular devices are ‘junk.’ When rumors of Apple making a tablet computer appeared, focus was on ebooks and publishing. But will the iPad turn out to be Apple’s answer to those pesky netbooks? One highly-placed supplier thinks the iPad could outsell netbooks.

With a $499 starting price, the iPad could “achieve annual sales of 10 million units, which is a significant estimate considering the current tablet PC market is only about 3 million a year,” said Paul Peng, executive vice-president of AU Optronics’ global business unit. AUO makes LCD displays.