UMPCFever, a Chinese blog, has posted photos of what it claims to be the first photos of the next gen iPhone in action. According to the Google translated page, these pictures show the new iPhone but as it is a prototype the external design may change so it’s not featured.

According to this blog, the new iPhone does contain an autofocus camera that is uses an on-screen square that can be moved by the tap of a finger to chose the object of focus. Also shown, is the digital compass feature (pictured above) that has been in rumor reports for the longest time. Those features seem to be specific to the next generation iPhone, though the site also demos MMS and Copy/Paste with Images.

We can’t judge their credibility as we’ve never seen any reports from UMPCFever, but the features shown seem consistent with circulating rumors.

- source: umpcfever.com

More findings on the iPhone 3.0 firmware! How about a possibility of Video Recording on the iPhone? This screenshot was discovered in the latest iPhone 3.0 beta, it shows the interface Apple will provide for video recording.

The screenshot shows the interface of what could be in the next generation iPhone. The interface has a switch toggle to switch between the still photography camera or the video recording camera. At the moment, the video recording feature is not functional and the interface is not accessible by default. This interface will only appear after configuration files are modified telling the firmware that the video camera is present.

Other interesting capabilities found in the configuration files include “auto-focus camera”, “magnetometer” (digital compass), and “Voice Control”.

- source: macrumors.com