Two of Silicon Valley’s biggest names. $33m in pre-launch funding. A roster of A-list celebrities ready to unveil a product to the world.

If you’re thinking the year is 1999 and you’re at a party in San Francisco, you’re wrong. It’s 2012 and the city is New York.

The event is the launch of Airtime, the latest startup from Napster creator Shawn Fanning and his old business partner, Facebook billionaire Sean Parker.

They, along with celebrities like Olivia Munn, Jim Carrey and Julia Louis-Dreyfus are on hand to introduce the world to the greatest thing since sliced bread. Just kidding. It’s Chatroulette plus video plus Facebook integration. And nothing is working. Don’t worry. It’s (apparently) not the product’s fault. The problem is the “custom built intranet” being used for the event. Sigh. If only Jim Carrey really was the ‘cable guy’, his (paid?) presence might have actually been meaningful.

But Airtime and its investors have a lot more to worry about that their star-studded slip-up: even more auspicious than Airtime’s debut is the product itself.

According to Fanning and Parker, Airtime is “the first live video network.” Except, of course, that unless you rewrite history prior to, say, June 5, 2012, it isn’t. Minor historical details aside, Fanning and Parker speak glowingly of their new creation. “Airtime relates people to each other, makes the connections as comfortable as possible. But without a facilitator [like Airtime], the fear of rejection is so powerful,” Fanning says. “I spent 10 years with identity trying to create the one true social graph, but no one is asking how do you rewire it to more ideally connect people. We’re taking everything I’ve spent 10 years working on and turning it on its head, doing the opposite,” Parker explains.

But you can only put so much frosting on the frumpy cake that is Airtime. Underneath the hood, the service runs on Flash (sure to elicit a few “yucks”), doesn’t support features found elsewhere (such as group chat), and lacks mobile support at launch (apparently Parker and Mark Zuckerberg aren’t talking frequently enough).

More worrying: before Airtime even has a meaningful audience, Parker and Fanning are planning an app platform and stating that monetization will come through full-screen video ads and, perhaps, virtual goods. This is what you might expect from savvy, experienced entrepreneurs looking to put together a fundable business plan; it’s not what you’d expect from true innovators focused squarely on building a great experience before they seriously consider hitting users with intrusive ads and building a third party ecosystem.

To be fair to Airtime, there’s always going to be skepticism when star entrepreneurs launch a heavily-funded venture at a celebrity-filled event. But that’s because star entrepreneurs are supposed to bring something to the table that lives up to expectations — expectations that Parker and Fanning, with their over-the-top, poorly-executed celebrity event, only increased.

The honest truth here is that the old adage “there’s nothing new under the sun” applies to the product Airtime launched yesterday. Indeed, the company’s claim to fame seems to be that it believes it has solved Chatroulette’s nudity problem. Not primarily with technology, of course, but through its Facebook integration, which the company hopes will keep people honest.

And if your Facebook identity doesn’t force you to behave, don’t worry: Airtime’s privacy policy says it may record random screenshots of your ‘private’ chats, which would enable human screeners to make sure you’re not showing your private parts. Yes, Sean Parker firmly believes that “people are way more entertaining than we give them credit for” (gee, thanks) but apparently he’s not very confident that they have the ability to keep their clothes on in front of a webcam.

Which leads us to the $33m question: is Airtime the next Color, or can Parker and Fanning prove skeptics like me wrong and recapture some of the magic they created with Napster?

At the end of the day, while many will not be inclined to bet against Shawn and Sean, Airtime looks like the type of startup you’d expect to see in a bubble — not the type of startup you’d expect to inspire one.