Another rumour to spill out of the rumour mill, this one again is the iPod Touch 3G, with Camera and Mic. According to a "well connected source" at Wired, They have received word of that new iPod Touch's are being made now with these new features included.

Rumors have swirled about Apple readying a new version of the iPod Touch with a camera and microphone, which, combined with a Skype account, would pretty much obviate the need for a home phone line once and for all.

A well-connected source tells us those rumors are on the money, and that Apple’s factories in China are already manufacturing iPod Touch models with integrated cameras and microphones. An Apple spokesman declined to comment when reached by phone.

If iPod Touches with cameras and microphones go on sale “in two to three months,” as our source expects them to (and which corresponds with our expected timeframe), they will transform the entertainment-oriented iPod Touch line into a voice communications tool wherever WiFi is available.