The new version has a much sharper 800×480, 3.5-inch touchscreen display and comes with a 1.3-megapixel camera for snapping photos to upload and share with friends. It also recognizes the reality of Web 2.0 content, according to the company; it now supports basic web browsing with Flash video and includes widgets for Facebook, Google, YouTube, and RSS reading. AIM instant messaging is added to the original mix alongside Skype calling.

It can also serve as a media player and comes with 1GB of internal storage to play MPEG-4 videos or AAC/ATRAC/MP3/WMA music; it additionally recognizes and can subscribe to podcasts, Sony says. While still connecting to the Internet using only 802.11 (now at 802.11g), a special deal with McDonald’s gives access to the fast-food chain’s Wi-Fi spots for free until the end of 2010. Available in February for $300.
