The 808 has a larger 4-inch screen with nHD (640 x 360) resolution and features a more ergonomically-minded case, rounding its edges and offering a softer, grippier surface. The key specs on the processing side of things include 512MB of RAM and a 1.3GHz single-core SoC.
If you're thinking that such a low-res display won't cut it in the modern smartphone world, things get worse once you look at the operating system: it's Symbian Belle.
In essence, Nokia has announced an underpowered Symbian camera. Perhaps there is a market for such a device but, personally, I just can't see it.
From my perspective, given the lack of Windows Phone 7, I imagine this is a remnant of the Nokia of yore. Nokia's engineers presumably had some prototypes remaining from the pre-Windows Phone days so, with such a high camera resolution, they decided to push it out just for the sake of the headlines.