Did Apple plan to add a camera to the third generation iPod touch -- just like the iPhone 3GS and iPod nano -- but pull it roughly a month ago due to technical difficulties? We heard that rumor last week, after months of previous rumors and leaks that made the camera seem all but a certainty.

For his part, Steve Jobs said Apple prioritized lowering prices over adding new hardware features.

Now, AppleInsider is merging those two story lines into one consistent, and not incredible report. Sourcing people familiar with the matter (PFWTM), those familiar with the situation (TFWTS), and others familiar with the situation (OFWTS), Apple initially decided to add the cameras to the iPod touch feature set only to discover issues with the camera sensors they received. So, Apple execs made the call to yank the cameras last month. However, Apple still wants to add the cameras back in to the hardware, and could do it at any time, and at the same price point.

Obviously, not announcing new iPod touches before the holidays, or announcing that newer ones might show up at some point (who knows -- maybe not even Apple yet -- when exactly), were not options, so they went with the beefier internals at 32GB and 64GB.

Wether that's the real, or even approaching real, story or not, likely only a few folks high atop Apple know for sure, but it does make a modicum of sense (even if well seasoned with salt grains).