My favorite iPhone artmaking app, Sketches, has been updated again, this time to version 1.7. It's been made compatible with the iPhone 3.0 firmware, which means you no longer have to leave the app to share your pictures via email, and they've added in a few other bug fixes and improvements which will set them up for the next major release, the big 2.0.

This release isn't done yet though: "Redo" has been added in -- when you hold the Undo button down in the app, you'll get a whole menu of different options to go to various points in what you've done so far. And the Zoom function has been tweaked and improved as well, offering a quicker response and a better resolution, even when zoomed in.

I'm a big fan of Sketches, and expecially of the app's ability to let you pull in a background from almost anywhere (from your phone's camera to the Google Maps app), and then make your own marks on it. It's more than just an art app -- I've used it as a memory jogger, and even as a way to quickly send directions out to others via email or Twitter. It's available to new users on the App Store for $4.99, or the 1.7 update is free to those who already have it.

Everyone's favorite battling invertebrates are coming to the iPhone and iPod touch very soon -- the game was actually announced a little while ago, but Team 17 now says the game has been sent off to be examined by Apple's eyes, and so, as long as it doesn't have any objectionable content (you can't object to exploding sheep, right?), we'll see it up for download very soon.

Exciting. Unfortunately, I'm coming off of a Worms 2 purchase on Xbox Live, so I'll probably be passing on this one, but if you haven't had a Worms fix in a while, the video on the next page shows what Team 17 is saying over on their Facebook page: it's "a full console-style experience," with extra options, including probably the ability to play your own music as you play. Multiplayer will only be pass-to-play to start with (bummer!), but they're hoping to add in both Internet and Bluetooth local multiplay at a later date. And there's no official word on price yet, but we should know it soon: look for Worms on an iPhone near you.

Danielle Cassley and Jason Citron are the folks with their names on Aurora Feint, but as Danielle told us in an interview a while ago, Peter Relan is the real mastermind behind the growing Feint empire. Not only did he put the two together in an idea lab, but he's one of the driving forces behind the OpenFeint enterprise. Under his oversight, the Feint folks have swelled to become one of the major forces behind iPhone gaming (and thus, behind the iPhone's app ecosystem itself).

Netanel "Net" Jacobsson is a newer addition -- he's previously worked with Sony Ericsson on their mobile devices and Facebook on their own growing app empire, and now he's arrived at OpenFeint to help them use the lessons he's learned at the biggest online social networks around on their social software. Get the sense of how big this is yet? Relan, Jacobsen, and Citron all have pretty big ideas about where iPhone gaming is going, and as 3.0 comes down the pike and introduces a whole set of new features from Apple, they're in the best seat they can be in to do exactly what they want to do.

TUAW sat down with the three last week, and chatted about iPhone 3.0 and why it's such a big deal for developers, how they're going to approach microtransactions (carefully), and what's coming next for OpenFeint now that they've rounded up a whole stable full of developers implementing their backbone. Click "read more" to continue.

Have you seen anything like that already, where developers have said, well we thought about doing it this way, but we're going another way?

PR: Too early. The phones aren't even out yet, user experience hasn't occurred yet. I would say July, we'll get a lot of feedback once these games come out with push notifications. The other thing that's kind of interesting, by the way, is that OpenFeint is working on cross-compatibility, because if I have a 2.2 iPhone and you have a 3.0 iPhone, and you send me a social challenge, in my app on 2.2, it won't show up as a push notification, right, because I don't have the 3.0 iPhone. So we are support the concept of push notifications in the plumbing and infrastructure of OpenFeint, however on a 2.2 phone, whenever the user next opens the app, they would see a screen that is an OpenFeint screen that would have a notification saying "you've got to beat my score," as opposed to seeing it on the iPhone icon, as a number, like the Mail thing, where it says you have notes waiting for you.

So I think as a user experience, the jury's still out, because the platforms are just getting ready, right? So the key here is to say that we're going to make it trivial by continuing our tradition, which is no servers, very easy to integrate, and some big games will launch in July with push notifications and then we'll go from there.

I think, to a certain extent, the same thing will happen on the microtransactions side. It already has happened with Xbox Live -- I don't know if you remember the story of horse armor, where everyone says "how can you release a different graphic and ask us to pay for it?" Have you seen examples yet of how developers want to use microtransactions? Are they aware of that danger or are they fearful of that at all?

PR: So I think the obvious one, just because I have, as I said, investments in companies in the Facebook app space, the big reason for microtransactions is virtual goods. So any kind of virtual world, avatar apps, some of these Mafia iMob apps, you can assume that there will be virtual goods unlocking with microtransactions. That one I think will translate over fairly well, in fact Net is going next week to China, where he's a keynote speaker at Tencent's annual conference. Tencent is an Asian company which does a billion dollars in microtransactions, all of it virtual goods. So I think that microtransactions, as we see them on social networks today, will come pretty much that way onto the iPhone social network, or the iPhone gaming network.

NJ: I also think that it will actually lead to the pricing, might even drop dramatically, but those who are charging for applications are going to go free, because they're going to earn much more by making it free and leveraging microtransactions.

Yeah, if you're charging $4 for an app and can sell four levels for $1 each, that's the way to go.

NJ: The user starts playing, gets very engaged, and wants to get to the next level and make the purchase, and it's very difficult not to make the purchase if you're engaged and you want to continue the game.

PR: The thing that's a little trickier, I think, is when you have microtransactions that aren't directly virtual goods, because virtual goods don't fit the theme. But are like chapters, or just additional content in the game. Then, I think, the business model is a little trickier, because that's your content update strategy, and to some extent, the iPhone user is used to -- like, if you look at the success of Pocket God, it's a double edged sword. If you talk to the Pocket God guys, their game is one of the few games that stays in the top five constantly. It's just always in the top five. And they use OpenFeint, and they're going to use push notifications, but when we spoke to him about microtransactions, he said, I have to figure that out, because their commitment to their userbase is, every week you're going to get an update with more content. So given that he's already committed that on the current price point, how does he unlock more content with microtransactions? So he was the first to say I definitely want to do push notifications, but I have to think hard about how I could incorporate microtransactions into Pocket God. So I do think there's a little more complexity there, especially when it's not just direct virtual goods. But I think they'll crack it. I think some other people we're talking to are certainly thinking of Chapter 1, Chapter 2, Chapter 3, three microtransactions. And certainly the virtual goods guys are like no questions how they'll do it.

And there are definitely precedents for both, in terms of episodic gaming on other services. Jason maybe you can talk about this, too, as a developer -- I'm really interested in the balance between making sure that what you're selling people is worth it, or something that's not. If you're asking to pay a dollar for a gun that's just a re-skin, people won't go for that. What do you think of that?

JC: I think, as a game designer, what you have to really think about is the motivations for why people will want to purchase this content. Whether it's a re-skin or not is less important than what it will allow you to do in the game. And the reason why I think virtual goods have done so well on social networks is that social pressure is a huge motivator to getting people to do things, and if part of that social pressure results in you engaging and buying virtual content, people are much more likely to do it. I mean, if you just have another gun that allows you to increase your DPS by two points, that's not terribly interesting to anyone but the ultra hardcore gamer, and then they'll probably just be pissed off that they have to pay for it. So that's not really an appropriate way to go about it. As a traditional gamer, buying episodic content or buying level packs, or substantially new gameplay experience, fits with my head, and then virtual goods, I think, have to be motivated through social pressure.

And the last question I have is just about the future of OpenFeint. I have to give it you guys -- there were quite a few, and there still are, services poking around that want to do the kind of stuff that you're doing. And just in terms of size and influence right now, you're kind of the top of the heap. So what's next, are you planning to kind of sit on the heap and just keep things set, or are you still aiming to improve here?

PR: I think that definitely we will continue to innovate and add more services to the platform -- there's no question that it's a platform play, and that we will continue to add features and additional things. I would say two things: one is, we will publish games, always, on top of our own platform technology, that will really kind of push the borders of gameplay design around the OpenFeint platform, to sort of demostrate and lead the way. So in the last announcement, we did hint at a new game coming out this summer based around push notifications and microtransactions, where we want to lead the industry. Because we never think that by being in front today, that we will be always in front. So we want OpenFeint to be the premiere platform, we agree that today, we certainly feel like it's way up there, but we feel like you constantly have to build new product on top of your platform to really make a world class platform. Because otherwise you're just sort of opining and thinking oh, this is good stuff. So we always want to test our own platform, and expect a title this summer based on OS 3.0 and OpenFeint features.

The second thing, which is, I think we're really doing something different around the business model. Ngmoco announced their Plus+ platform this week, and it's really a publishing tool rather than an open platform, and we're pretty proud of the fact that we're sort of the biggest player who is really able to provide an open platform where a developer does not have to make a publishing deal with us in order to get access to the platform. Ngmoco's platform is hey, we have this platform, it's part of our publishing network, and if you want to publish games with us, that's how you get the platform, and obviously you know the economics of the publishing business in the game industry, right? There's revenue that has to be sacrificed there. So I think as a guiding strategy, we will never make our platform related to anything with our publishing because it's our belief that this OpenFeint thing does two things that we will always have to provide for publishers: no servers, because 90% of developers have no experience building servers, they build great console games, client side stuff, C, C++ programming, all this stuff, but they really don't have any backend experience. And two, we're not going to take rev share, in terms of publishing deals. And those two things, I think, are sort of our long-term guides. The third thing is to build our own games constantly, so we can use Danielle and Jason's game design and knowledge to say here's the kind of games we can do. So if we can do that and execute, I think, with some fingers crossed, with some luck, we'll emerge as the de facto standard, which is our goal.

I had talked to Danielle a little about pricing already, but I wanted to ask about microtransactions as well -- when you do that stuff, are you not skimming off revenue as it comes through, or what is the pricing scheme there?

PR: Well even today, we have cross promotion inside OpenFeint 2, even before microtransactions, where if two players meet in a lobby, and they're from different games, then one player clicks on the other player's game, and you go to the App Store and you buy that other player's game? That's what you call our one-touch iPromote product inside of OpenFeint, it's a big draw for a lot of developers, because our community is now three million and growing -- we call it our social bazaar, because the App Store is so cluttered now that it's hard to differentiate. So you use OpenFeint and get your game in front of three million people in these lobbies. That revenue, when someone buys a game using OpenFeint's cross promotion feature, doesn't come from the developer, it comes from Apple. Because we are an Apple affiliate, through BigShare. So we take the user into a webview, which is our own catalog, where you can buy games off the App Store, and then Apple actually pays us. So that's hopefully -- this is the same thing, the whole idea is to get Apple to pay us every time there's a purchase in the App Store, including in-app purchases, as opposed to the outside.

Great. That's pretty much everything I had to ask, was there anything else you wanted to share? I guess we'll keep an eye on the game coming out this summer.

JC: Yeah, I guess the only other thing worth mentioning is that OpenFeint is available now -- it can be downloaded by anyone from our website. It's real.

Cool. Thanks very much.

With iPhone OS 3.0 only having been released yesterday, two big companies are already angling to be developers' go-to for setting up push notifications and other online services for the new apps. OpenFeint was the first service we've heard about -- they have been offering social networking connections to developers for a while, but with the new firmware release, they tell us that they're also hosting options for both push notifications and microtransactions to their stable of app developers.

That stable includes apps like Pocket God and Aurora Feint (Danielle Cassley of both Aurora Feint and OpenFeint told us a while back that she was very excited at the prospect of microtransactions with 3.0), and both of those games, as well as others on the service, are planning to include push notifications with "social challenges" -- you'll challenge a friend to complete a certain goal in game, and then get notified when they meet that goal. Look for those new features in an OpenFeint app near you.

And OpenFeint isn't the only service jockeying for developers' attention -- Urban Airship is also making a bid to host push notifications for iPhone game developers. They've landed one of the first push-enabled games, Tap Tap Revenge, and are looking to offer push to more devs, along with in-app purchase support as well. They don't quite have the library together that OpenFeint already does, but their service integrates, they say, in just a matter of hours, and their aim is to make it "brain dead easy" for developers.

The floodgates are open, and we're sure to see more and more companies jump in on hosting plans like this in the future. Prepare to be pushed.

The iPhone blogs says they've uncovered the very first photos of a brand new version of the iPhone (the pictures are watermarked from a site called UMPC Fever), and while there's no actual indication that they're real (at the very least, it wouldn't be hard at all to make a picture and load it on the iPhone stream), they are worth a look, if only as ideas. The pictures hint at what's basically a dream roundup of new iPhone hardware: a camera with autofocus, a digital compass, and there are hints at a CPU log as well (which may be a developer function of some kind).

A few people note that there is a percentage near the battery, but that's actually a known function of 3.0, and it's been possible on jailbroken iPhones for a while as well.

To add to the mystery, commenter Dstreelm in the comments over there took a look at the metadata on one of the photos (the one supposedly taken by the iPhone), and it was taken near Hong Kong, just a day or so ago. It's definitely all rumors, so take it all with a grain of salt, but it does lend more credence to the idea that we'll be seeing a new version of the iPhone hardware very soon.

This is interesting -- Alex Winston, Ltd. has come up with what they call the Wolfenstick, a little iPhone app that can control Wolfenstein 3D Classic with a second iPhone through the audio port. Obviously this isn't a very practical setup, as buying a second iPhone just to control games on the first one probably isn't in anyone's interest. But it does open up a whole slew of possibilities for how a connection like this might be used -- as you can see in the video above, not only are controls and the accelerometer able to be transferred, but even game and app information can be sent across the cable.

Of course, the 3.0 update casts a nice large shadow across ideas like this -- we know for sure that there will be more hooks for accessories to work with apps on the iPhone, so having to go through the audio port may end up being more of a novelty, as it'll likely be much easier to go through the connector on the bottom of the iPhone. But if you want to play while the unit is charging (or just want to connect two iPhones with nothing more than an audio cable), there's definitely some promise here.

Danielle Cassley took one of the strangest paths you might find to game designer -- just out of a computer science degree at Berkeley, she was trying to get a job as a babysitter when she met Peter Relan of the YouWeb Incubator. And rather than have her take care of his kids, he decided instead to put her in an idea farm and see what happened.

Aurora Feint was what happened -- she and Jason Citron, full of ideas, created a game in just ten weeks that took over the App Store out of nowhere in its infancy. The game originally released for free, and while it promised to be an MMO, it started out as a puzzle/RPG game -- people didn't quite understand what it was, but they liked it anyway.

Almost a year later, Aurora Feint has spawned four different versions and even a social platform, and Danielle and Jason are still full of ideas. In this exclusive interview with TUAW, she talks about how Aurora Feint came to be, what she thinks of the App Store so far (and if developers will ever be able to charge the prices they want), and what's next for the Aurora Feint series (they've just released a new version of The Arena called Daemons) and the iPhone platform. Click the link below to read on.

When all of those iPhone 3.0 features were first announced, one of the features that stuck out most to me was the incoming A2DP ability -- the new iPhone OS will let you stream out music to a Bluetooth source, like headphones... or your car. And over at Cars.com, the guys got their hands on a Toyota Venza with Bluetooth capability, and did just that, as you can see in the video above. It's pretty slick -- no wires, no annoying pairing, just hit the Bluetooth button on the iPod, choose the car's Bluetooth source, and press play. We're not sure about audio quality (it should be at least listenable), but it looks super cool.

There are, as usual, some catches. I for one was disappointed to hear that this A2DP ability won't work with first-gen iPhones like mine -- you'll need to have a 3G to do something like this. And of course, this will require the iPhone OS 3.0, which isn't technically out yet (though devs in Apple's development program are playing with it right now, which is why you can see it in the video above). And finally, you'll need a car with the Bluetooth capability, which (though I haven't owned or shopped for a car for a few years, so maybe things have changed a bit) is still kind of hard to find.

But hey, even if you're not there yet, here's a look at the future. Where we're going, you won't need wires to get your iPod playing music on the car stereo.

Update: Well, if what you wanted wasn't in that laundry list, you may just have unrealistic expectations. MMS, copy and paste, downloadable paid content, turn-by-turn, A2DP... the list goes on! We'll have detailed reports momentarily.

The bad news is, we don't have anyone on the inside of today's press event; the good news is, we've got all of you. Join us for a live chat right here as we meta-liveblog the updates from all across the web during today's iPhone 3.0 announcements.