What people don't get is that there is a limit to the increase in quality that is gained by adding megapixels. Never mind that the camera is fantastic for a phone camera - people figure that, if the camera has about twice as many pixels as their previous one, they should be getting pictures that are twice as nice.
There are several problems with that...
1. There is no optical zoom. Digital zoom cheats by (more or less) cropping the image, so you are getting less resolution as you zoom in.
2. The primary design consideration for the lens is size, not optics.
3. Camera software is a secondary consideration for what is basically a computer.
4. The flash is pretty much "all or nothing".
5. There is no image stabilizer.
6. Most importantly, the sensor is nowhere near as large as it is on most traditional cameras.
If you want to know more about any of those, Google away.
Now, having said all that... For a phone camera, the one on the Incredible is... incredible. It's fast, takes good photos, and has a decent feature set. The quality of photos on the Incredible is very close to that of some point-and-shoot digicams.
A smartphone is jack-of-all-trades, and a master of none. Like anything on the device, the camera is not quite as good as a dedicated camera would be. Of course, the browser and computing experience isn't as good as it is on a dedicated PC/Mac, and the call quality isn't as good as it is on a landline.
But for a single device that I can call, email, chat, SMS, stream music and video to, check Facebook on, and customize with several thousand apps worth of functionality, the camera is pretty damn good.