You know, this really is starting to get silly.
The 1-2-5-8-1000megapixels part is almost irrelevant. Two things matter in photography:
Size of imaging receptor (be it film or sensor) and Quality of optics. There is a reason why a pro lens costs $10,000, and its all about the glass.
A $5 plastic "lens" isn't going to cut it. Coupled with a 1mm "2MP" sensor that can barely be seen with the human eye, and you got yourself all the fixens for some really horrible images.
Believe me, on a "$400" pda/phone, the total hardware budget is, at best, a bit over $100. You are not going to dedicate a great portion of that budget to the camera you glue on the back. You'll get the cheapest sensor you can that says "2MP" or whatever the checkbox requires, and then you'll slap a 2mm plastic lens on it, and ship it.
I believe the guesstimate on the iPhone hardware cost was under $200. Something like $180? If so, they might have spent twice as much ($30? $40?) on the hardware for their camera. Mostly in a better lens, would be my guess, and perhaps a slightly larger sensor size.
Anyway, don't worry, be happy. And don't expect great pictures... heck my Nikon D70 DSLR only has 6MP, but thanks to the overall quality and optics, it takes way better photos then an 8MP $100 Point and Shoot. Which you would expect
