As Macworld gets underway, expectations are running high for Apple (NSDQ: AAPL) and news is coming out thick and fast about the iPhone. First, there’s the debate over whether Steve Jobs will trot out a 3G version of the iPhone, as has been rumored about since the launch of the current version. AT&T (NYSE: T) CEO Randall Stephenson let slip late last November that a 3G version was coming this year, but Dow Jones quotes American Technology Research analyst Shaw Wu that if it does happen, the actual phone won’t be available until the second half of the year. As Wu pointed out, network coverage, price points and battery life issues still need to be worked out. Once those are smoothed out Apple can position the 3G iPhones as an upscale product while targeting the current iPhone to the general consumer market.

There’s also speculation that Apple will release a 16 GB iPhone as the UK newspaper The Daily Telegraph reports. If that’s the case, the article says there’s going to be a lot of angry British customers who “queued through the night in the rain” to get a paltry 8GB version.

Meanwhile, the Mail on Sunday (via Thisismoney.co.uk) reports that Apple has told UK operator O2 and the Carphone Warehouse, the only mobile phone retailer to carry the iPhone, to not go around blabbing sales figures. Reports had surfaced earlier that the iPhone hasn’t been shifting as well as anticipated in the UK—albeit all based on anecdotal evidence and trips to local O2 stores. O2 UK CEO Matthew Key, meanwhile, had reported that the operator was in line to sell 200,000 iPhones by early January and said he expected a 3G version would also do well.

On the technical front, a month after Google (NSDQ: GOOG) released its first set of iPhone applications, the search giant has come out with improvements to coincide with Macworld. Google has fine tuned its iPhone suite of applications that include Search, Gmail, Calendar and Reader among others by making them faster, improving their usability and making them easier to activate and navigate using a touch screen.  They’ve also made them customizable and people can now switch back and forth between applications without having to sign in each time. Gmail automatically refreshes itself with new emails popping up immediately, while calendar gets a month view, letting people view an entire months worth of appointments. They’ve also added iGoogle gadgets on the iPhone.

• UK iPhone Sales Sluggish?
• O2 Expects To Sell 200K iPhones By Jan; Big Data Users Despite 2G Network