Lego your up way too late
Yes is the short answer on the pincushion effect. But it is really much more simple than that. The chip is photographed at an angle. Unless people are using a copy stand and and have leveled their camera's film plane or in this case most likely the ccd plane of their camera and the surface they have the chip laying on just the angles of these two surfaces being off from each other can make the chip and label look off center, and off center from each other.
Plus the fact that the lenses on most of the really cheap cameras do not have the best correction for color shift and distortion would easily add to the problem. The cheap camera that Frankendork, or what ever his name is,was using may not have even had multiple lens elements. It certainly had a relatively large aperture because with all the light it had it could not close focus at all. For as small as the camera most likely is it looks like it is a fixed focus lens good for about two feet to 15 feet.
Most modern cameras have computer designed lenses and do a decent job for what they are designed for (even those cheap disposable cameras with their plastic lenses can get the job done) but they are designed for shooting pictures of your friends and families mostly outdoors and mostly in the sunshine. Plus most people only get the 4x6 of 3x5 prints. If you get them enlarged to 8x10 or 11x14 it will be very obvious that the picture is fuzzy and if you were to shoot a focusing target with them the pincushion and flaring would be shocking. The lenses they make for most of your higher end point and shoot digital cameras are much better but if the ccd plane and the chip plane are off axis then you would still get the off center effect. One way to fix it would be to use a lens that you can adjust the tilt and shift like the old view cameras with the bellows. That is why they use them to photograph tall buildings by adjusting the tilt you can keep the building from looking like it is leaning over you.
Does that help?
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