I think you are confused by what we are discussing. If a camera doesnt take better pictures with a flash, then why does just about every camera made, come with a flash???
Even professional photographers use artificial lighting in professional shots. It may be a flash or it may be a studio lighting. And last I checked, I dont hold my kids birthday parties in a photograpy studio.
If you hadnt noticed, camera technology trickles down to the camera phone. At current time there is no application that allows any LED to take the same quality pictures as the xenon equipped n82. The N82 has been compared to many camera phones since its release, and has (until recently) been declared the victor.
Please remember that most people that are taking pictures with a camera phone, are not taking pictures to add to their professional portfolio. They are simply taking a picture to capture the moment. Whether its birthday party, out at the bar with friends, or sitting around a campfire. If I was to use any phone to date equipped with an LED or a dual LED flash, I would not have captured those moments.
Time will tell if the N86 has this remarkable new LED technology. But if it was so great, we would have seen it rolled out in new point and shoot cameras. The only reason that it hasn't is because it doesnt give you the best possible picture quality when using a flash. Since stand alone cameras are not as concerned about battery life and size restraints as camera phones, they do not want to decrease quality for these power improvements.