This is old news but I found this really interesting. It seems that on Feb. 9th, Thinkscret.com reported a new iPod in the works which will sport a 3.5" touchscreen and do away with the mechanical wheel for user interaction. It could be out as early as April of this year.
Engadget has some mockups. I don't know if these are really from Apple or if someone just made these up.
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