A new HTC advertisement seems to suggest that HTC is readying a new Windows Phone 7 device with an unprecedented 16 megapixel camera as well as dual LED flash. This is still classified as a rumor as neither HTC nor Microsoft has announced such a device.
The video doesn't really show much else, so we don't know any other specifications for the phone. Pocketnow notes that the device pictured actually appears to be the HTC Desire S, but with Windows Phone 7 buttons instead of Android buttons. The speculation is that this might be the HTC Ignite, though the last rumor said it would come with a 5MP camera. Take a look for yourself:
It's worth noting that the video is 22 seconds long. The remaining 8 seconds would likely be used to show the name of the phone, an HTC logo, a Windows Phone logo, and even a carrier logo.
A high megapixel count does not guarantee good pictures (never buy a camera just based on how many megapixels it has) but it's still quite interesting if true. We're hoping that the camera also sports a great lens, otherwise the pictures won't be anything to write home about.
Microsoft has Chassis 1 requirements for WP7 devices, but unfortunately most of the phones currently available have only the bare minimum. This also means there is little that differentiates them. A 16MP camera would not only stand out among Windows phones (the highest is currently 8MP), but it would also set the bar high for the competition.