You have to watch megapixel ratings on phones, and what you're actually getting. Yeah, my OG Droid has a 5Mpixel camera, too. But it SUCKS... it's just a terrible 5Mpixel camera. I would have preferred to have the quality of my old Canon Pro90IS... only 2.6Mpixel, but a very good 2.6Mpixel.
Going forward, there's a problem with phone camera increasingly in pixel density. One is simply that, if you don't increase the sensor size (and most phones use 1/4" sensors, though they're starting to get a little larger... but we all want thin), the pixels get smaller, and so the light sensitivity gets worse, all things being equal. They're addressing this with "backlit" sensors... this means that there are electronics on one side of the chip, sensors on the other. That works once, then you're back to dropping sensitivity.
The other problem is diffraction limit. Based on the wavelength of light, you get diffraction -- undesirable bending of light due to the size of the aperture. For a 1/4" sensor and f2.8 lens, the diffraction limit is about 5Mpixel. That means, a perfect point of light in an image can only resolve to about the size of a sensor site on a 5Mpixel sensor.. going to 8Mpixel doesn't make things any sharper. So to really get a boost in sharpness, you need either a larger sensor or a smaller f-number... which it likely to mean more size. Given all they're saying about the Nexus Prime's photo quality so far, one can hope. Of course, given the rumor it's using the new OMAP 4460 processor from TI, perhaps downclocked to 1.2 or 1.3MHz (specs are 1.5MHz, various rumors mention each of these speeds), could just be folks have read the specs on that chip, which point out the camera interface is "DSLR-worthy", capable of handling high quality image processing and sensors up to 20Mpixel.
On the other hand, the 4460 is kind of a let-down for anyone looking for "the whole package"... including interesting gaming. This SOC uses the same PowerVR SGX540 GPU you can find in the Samsung Galaxy S. That's a bit faster than the iPhone 4, but short of the dual-core SGX543MP2 in the iPhone 4S and iPad. And consider, pushing 2.4x as many pixels, the screen refresh would be annoying slow compared to the Galaxy S, much less the SII. I'm hoping instead to see the Samsung Exynos 4212... that's a 32nm chip (versus 45nm for the 4460), so lower power consumption for the same performance. And a new GPU. Plus, the rumor mill was pretty sure this chip was also going to spoke of at the cancelled debut demo of next week.