The chipset powering the latest 3rd Gen iPod touch and the iPhone 3GS is well capable of supporting FM radio. This given with some ’sources’ have kicked off the rumor that Apple is working on a radio.app to unlock the Radio feature via a firmware update sometime in the future.

What makes many believe this is the reason that Apple has already relented and powered the iPod nano 5G with a integrated radio FM. The Radio on an iPod touch is believed to be something that would be capable of running in the background like the music app. And thats not all that we are hearing:

The holdup on this app is that Apple is trying to integrate the Mobile iTunes Store purchases into the functionality of the program. For instance, if you like a song you are listening to on the radio (and that station supports tagging and you are in the US), you will be able to push a button and see the song (and all of the information around it) in the iTunes Mobile store. [9to5mac]

So does the radio make you forget the missing camera in the iPod touch 3G?