Apple CEO Steve Jobs returned to the keynote stage at the company’s press event, for the first time since his liver transplant earlier this year, to announce several upgrades to the iTunes service, as well as a new line of video-recording iPod Nanos.

Among a range of improvements to the iTunes software is the addition of what Jobs called the iTunes LP, the official name for the digital album project known until now as Cocktail.

Artists such as Bob Dylan, the Doors and Dave Matthews already have iTunes LPs for sale in the store, offering exclusive bonus tracks, videos, photos, lyrics and more for $17 to those users who upgrade to the new version of iTunes.

Additionally, as previously reported, Apple is adding ringtones to iTunes. Until now, iTunes allowed customers to create their own ringtones from certain tracks sold on iTunes, but availability was extremely limited. The new $1.29 ringtones are “pre-cut” tracks from participating labels. The price point undercuts even the cheapest ringtones available from mobile operators, typically between $1.50 to $3. The ringtones are added to an iTunes service that has sold 8.5 billion songs in its lifetime, and Apple revealed there are 100 million iTunes accounts.

The additions come amidst other upgrades such as a revamped navigation system, upgrades to the Genius recommendation service, tweaks to the artist and music pages, integration with Facebook and Twitter accounts, and new synching abilities that include filtering by genre. Of particular interest is the new Home Sharing feature, which lets iTunes users share songs and video content with up to 5 computers in the same household, and view content from each authorized computer within iTunes.

Jobs also introduced an upgrade to the App Store, adding its Genius recommendation engine to the popular service. Just as the Genius toolbar recommends new songs and playlists based on what users are listening to, Genius will similarly recommend iPhone apps based on which apps users already own. This is a much-needed addition, seeing as the 75,000 apps now available via the store is getting rather cluttered and difficult to navigate. Jobs announced there have been 1.8 billion apps downloaded since inception, not including updates.

As for devices, Jobs announced that all new iPod Nanos will come with a video camera, complete with microphone and speaker, as a means of getting into the portable video market. The new Nanos are just as slim as before, and will also include an FM radio, voice recorder, and pedometer that synchs with the Nike Plus system.

The new Nano line will run $160 for the 8 GB model and $180 for the 16 GB model, both available immediately.

Earlier in the day Apple lowered the prices on all previous iPod models—except for the Shuffle—the morning of the event. Prices for the iPod Touch, Nano and classic fell anywhere from $120 to $20 depending on the model.

The company also used the event to position the Touch as a gaming platform, taking on both the PSP and Nintendo DS handheld devices as “too expensive” and “not fun,” according to Apple senior VP of worldwide product marketing Phil Schiller. Tapulous CEO Bart Decrem—developers of Tap Tap Revenge—introduced an iPhone/iPod Touch exclusive called “Riddim Ribbon”: a DJ rhythm game that lets players remix songs by skipping between tracks.

All in all, Apple has sold 220 million iPods sold to date, claiming 74% of the market. Of them, 20 million are iPod Touch models. Separately, the company announced 30 million iPhones sold in the last two years.

The event closed with a performance from Norah Jones.