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I believe its still AT&T's 3G network that is the problem. on WiFi the iPad 3g video looks OK, and the video on the WiFi iPad is OK.
Sounds to me like its more like Apple doing market research on their prototype phone before making the final changes before it goes to manufacturing. They don't do focus groups but this is even better and costs way less money too. Can anyone believe that a company that keeps its secrets so closely...
The bad. - No flash support, but will not matter if web developers start using html 5 exclusively [that won't happen but is worth noting]. - 1024x768 screen welcome to 1995, aspect ratio should have been 16:9 or 1.85:1 not 4:3 - no multi-tasking. WTF - they brought back the palm stow-a-way keyboard...