It appears TechCrunch has some "information" about an iPhone application from Facebook focused on photo sharing. Nothing appears to be concrete at the moment, but generally when rumors start, it at least moves a company in that same direction if they weren't already going that way.
Here is an excerpt from TechCrunch:
"But again, the app looks amazing. We've heard that internally it is being called either "Hovertown" or "WithPeople". And while it looks like a stand-alone app right now, there are also signs that it could be eventually integrated into Facebook's main iPhone app - as well as the main site.
Either way, based on the images in front of us, the best way to think about it appears to be Path meets Instagram meets Color meets (Path's new side project) With - with a few cool twists. And obviously, it's built entirely on top of Facebook's massive social graph."
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