The game uses the iPhone 3G and 3Gs' built-in GPS to locate the gamer and then scatter virtual letters around their real world location. You then have a set amount of time to locate the letters and use them to spell words for a score.

As I mention in the video, it's a neat concept that needs some work.

The biggest issue is that the game doesn't allow you to manage or change the play space, instead dropping letters in a football-field space around you. It would be much better, and more playable, if you could shape your playspace on the map before starting.

I also wasn't a big fan of the scoring system, which didn't take into account the letters used, instead just scoring based on the length of the word.

In it's current state, Seek N Spell is a curiosity, an interesting tech demo, but with some work it could be a substantial and fun outdoor game.

The game has you pick a big open space, than uses GPS to create a satellite map of your location. The game then spreads virtual letters across the map that you have to run to to gather up and add to your virtual tray of letters.

The letters are then used to spell out words for points.

The game recently won an award for Best Use of Technology in the 2009 Come Out & Play Festival in New York. To celebrate, the developers have dropped the price of the App down to 99 cents from July 2 to July 6.

"We are honored that the Come Out & Play Festival recognized Seek ‘n Spell for its innovative use of the iPhone and GPS technology," said Dan Walton, co-founder of The Retronyms. "We felt that Independence Day weekend would be a perfect time to celebrate with our fans by offering a holiday discount. Seek ‘n Spell is a great game to play with family and friends during picnics, barbecues, or any other outdoor festivity."

While the 3GS' loadtimes are substantially faster, that alone doesn't really warrant the upgrade, I think. Only time will tell if newer games, developed to take advantage of the new hardware and software upgrades, will make the purchase or upgrade to an iPhone 3GS worthwhile.

Our sources told us that the new iPhone will also tout much more robust Bluetooth support, an upgrade that will allow third-party developers to to release add-on products like a keyboard or game controller. One thing the new iPhone won't have is a physical keyboard, instead Apple plans to continue to work on "perfecting" the existing one.

The new network, which AT&T is currently working on, in theory may also allow AT&T to extend its exclusivity deal with Apple.

Both the new iPhone and the new firmware for the current iPhone will roll-out on July 17, sources tell us.

This rumor comes as word hits that Apple is also starting to hire in-house game developers.

The inclusion of the improved 3D graphics and hiring of developers are, in many ways, Apple's acknowledgment of the growing importance of gaming to the platform. Another thing the developer is considering to help bolster gaming on the iPhone include the possibility of a new store dedicated solely to gaming. The company will also be watching with great interest the roll-out of in-game microtransactions with the latest firmware.

We were unable to confirm any of this beyond our sources, so take this with a grain of salt and keep your fingers crossed for the big announcement hitting this coming Monday. We've contacted Apple for clarification on the matter.