(FORTUNE Magazine) – BEST TECHNOLOGY The camera phone

To judge by Sprint's television commercials, the killer app for picture phones--mobile phones with built-in cameras--is taking snapshots of slobs with atrocious table manners and instantly sending those pictures to the slobs' best friends. But camera phones are destined for greater things than documenting bad etiquette or dubious fashion sense. Considered a novelty when they appeared three years ago in Japan, camera phones are rapidly gaining popularity worldwide; tens of millions are already in use, and analysts expect the numbers to rise to hundreds of millions in the next five years. By that time camera phones will outsell all other forms of cameras.

Their rapid spread has profound implications for the photography business, which in 2003 saw sales of digital cameras overtake film cameras for the first time. While the demise of film has long been expected, the camera phone as perpetrator caught us by surprise, as did the related fact that Finland's Nokia, the leading maker of mobile phone handsets--including the popular model 3650 shown here--will soon be the world's largest camera company.

From a technology perspective, phonecams are moving ahead at a snappy pace. The first one-megapixel models arrived earlier this year, and Casio recently introduced a two-megapixel model with autofocus and a 10X digital zoom to the Japanese market. Some newer models even offer a built-in flash (sayonara, battery life). It's hard to overstate the disruptive impact of digital cameras; Eastman Kodak announced recently that it is ending long-term R&D for film and henceforth will focus its consumer photo business on making prints.

Sloppy eaters aren't the only ones who should be wary of candid camera phones. Because they are often indistinguishable from regular mobile phones, you can never be sure if the chatty person in your health-club locker room is being lewd or merely loquacious. Your company may ban cameras from manufacturing or R&D areas, but is it willing to ban cellphones? The privacy and security issues raised by camera phones will be among the most vexing tech problems we'll face next year.

On the positive side, emergency medical technicians can send images of an accident victim directly to the ER doctor, and construction foremen can eliminate confusion by snapping a picture and saying, "Bring me a dozen more of these." And no one is happier than mobile phone carriers: When it comes to billable network minutes, a picture truly is worth a thousand words.

WORST TECHNOLOGY Paperless voting

Remember all the chads and dimples that made voting for President so chaotic in Florida three years ago? In a well-meaning effort to fix the system before the 2004 elections, many communities--in Florida and in other states--have begun to install direct-recording electronic machines (DRE), which instantly record and tabulate votes; some even use fancy touch-screen technology similar to automated-teller machines in banks. Computer scientists are alarmed, however, by the potential to manipulate the new machines. Internal documents from Diebold Election Systems, which has sold more than 33,000 AccuVote DRE machines, acknowledge that there have been security flaws, although the company denies that the flaws could allow a hacker to cast multiple votes or alter the votes of others, as critics suggest. Diebold asserts that the problems have been or are being fixed, but it is waging a legal war to have the embarrassing documents removed from the Internet.

Runner-up: Talk about embedded processors! A Florida company, Applied Digital Solutions, wants consumers to surgically implant its radio-frequency identification device (RFID) under their skin. The company says its VeriChip system would reduce identity theft, enhance airport and office security, and eliminate the need for picture IDs. A VeriChip-based ATM machine, for example, would scan a customer's body for a unique radio ID signal before dispensing cash. Besides problems with privacy and an almost complete lack of industry support, there's also the issue of whether anyone would voluntarily pay for surgery to have the chip implanted.

Update: Last year's Worst Technology of the Year, the Pentagon's nationwide Total Information Awareness data mining and spy-on-everybody project, had a stake driven through its suppurating heart when Congress cut off its funding in 2003. TIA's godfather, retired admiral John Poindexter, resigned shortly thereafter. Good riddance.

For more tech advice, see Peter Lewis's weblog at www.fortune.com/ontech.

Feedback? technology@fortunemail.com