The DSi uses SDHC cards, regular size, not mini.
It also includes bigger screens, wireless G (DS Lite and PSP uses wireless B), WPA Security, 256MB of internal memory, improved speakers, the volume slider is now replaced with a volume rocker like the Gameboy Micro (you can also change the brightness while playing (just hold the L button and press the volume rocker up or down)... and some games will take advantage of the storage: for example, the upcoming DJ Max Technika will offer additional DLC songs for those who have a DSi.
Also... some people still thinks that the battery life is shorter, but that's not true. Well, the battery life is shorter at the highest brightness, but the DSi has an extra level of brightness compared to the DS Lite. If you turn the DSi brightness to the DS Lite max level, the battery last the same.
The DSi is not a new generation DS. It's just a new revision, kinda like the PSP-1000, PSP-2000 and PSP-3000. The system is not intended to be a replacement for your current DS system. If you need and want the added features, then go for it. If not, the DS Lite will have the same games (minus the DSiWare games)... the DSi is also for people who don't have a DS system or for people who wanted to buy a DS before but didn't get one because they wanted a system with all the other features.
And about the camera... the resolution is 640x480, just like almost every laptop integrated webcam. Nintendo never promoted the camera as a replacement for a digital camera or to make prints, etc. If you see the new ads, the DSi Camera is to have the pictures stored in your DSi system... play with the pictures, share pictures with other DSi owners, make slideshows, animations, a photo journal... but everything stored in your DSi. The camera resolution is more than enough, specially because the screens resolution. The pictures are intended to be used with the DSi system and nothing more.
You guys can check more info about the DSi at
http://tinycartridge.com/
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