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I'm sure other users have this issue. My last phone was a Nokia N86 8MP. Like the x10, it to had a 8.1 MP camera. Unlike the x10, the images on the Nokia seemed a little clearer, but what really sets the Nokia's camera apart from the x10's is the flash. I recently tried taking a photo with the x10 in a dark room, although the photo light seemed bright, you couldn't see anything past 5 ft, the same applies in video mode. With the Nokia that was never a problem, the flash was bright enough to light up the entire room and so was the video light. I suggest, if it's legally possible, SE have it's testers look at the Nokia N86 8MP and borrow, if not improve upon their camera, flash and video setup.
I agree that the camera light on the X10 isn't awfully good. I think the phone is expected to get a flash for photos with a later version of the Android software. Not sure if it is with Android 2.1, due to begin rolling out next month, or in version 2.2, for which there is no date yet promised. But I suspect that it is largely a hardware problem rather than one related to software, so it might make little difference. Same with the speaker. On my Nokia 5800, the camera (though only 3.1 mB, I think) and the sound through the speakers were far, far superior to the X10.