I'm very interested in an iWatch.
For the first generation, Apple will have to decide which radios to include: wifi, bluetooth, and cellular. My belief is that cellular would use up too much power. So, it will probably only have wifi and bluetooth.
I don't know about others, but the 6th gen iPod nano was obviously (to me) an iWatch prototype. That is a good start. If the iWatch only has wifi and bluetooth, it will work like a mini iPod touch that is always synchronized with your iPhone and/or router. This way, you can get alerts, info, and the internet on the iWatch.
The interface has to be done right and easy-to-understand. The watch itself has to be reliable: a charge should last for at least three days and the sync with the iPhone should "just work." Water resistant and durable.
To make the iWatch successful, Apple only has to customize the most basic apps for the smaller screen: Messages, Calendar, Photos, Stocks, Maps, Weather, Notes, Clock, Calculator, Contacts, and Mail (like on the original iPhone).
Yes, I believe there will be a camera on the iWatch. And Siri will be available. They should skip Safari on the iWatch.
Will the iWatch be able to tether to the iPhone for voice calls? I don't suggest it with the first gen. Maybe the second generation, when they introduce the iWatch App Store.
They could also add more health-related functions. Stuff that you see in the Basis watch and the Jawbone Up.