The bolded part is referring to the front-facing camera. It has remained unchanged at VGA resolution for photos and video (640 x 480 or about 0.3 megapixels).
They can't even get the current VGA camera going properly over 3G with Facetime. I don't think they'll be bumping the rez of the front camera any time soon.
They've used the same front-facing camera in the iPhones and iPads for two years now without upgrading them, so that's one reason they aren't mentioning the resolution. It's not something they can brag about.