Judging from its appearance, function outweighs form. The original EyeToy had an industrial yet streamlined look, like one of those battleships at the beginning of The Fifth Element. The all-new Eye, on the other hand, looks like it could be one of the loser droids at the back of the sand crawler's holding pen.
But like I said, this is a feature play.
The Eye has a four-microphone array for multidirectional voice location tracking, enhanced echo canceling and background noise suppression. That means, according to Sony, no headset necessary.
The USB 2.0 camera can capture up to 120 frames at 320x240 resolution; a still impressive 60 frames in 640x480. It has a digital zoom (or perhaps, digital wide angle) feature that captures either a 56 degree field of view or a 75 degree field of view. And it's designed to work better than its predecessor in low light. Compare all that to the XBox cam's 640 x 480 res at 30 frames per second.
EyeCreate software that comes with lets you take photos, mess with them, and even capture video and audio to save on your PS3's hard drive. The best EyeCreate feature is time-lapse photography: when taking one pic every 15 minutes for 12 hours reveals you in the exact same position with the same blank look on your face, you will have documented proof of how sad your life really is.
PlayStation Eye Brings Next-Generation Communication to PlayStation 3 [Sony Computer Entertainment America]