New ~10.5-inch model with nearly bezel-free design rumored.
This coming Tuesday, Apple invites you to the unveiling of a breakthrough digital device, (Hint: it's not a Mac).
What is rumored:
iPod -- can be synched with the computer using a high-speed cable connection that allows consumers to download their music into a portable system, which can then be accessed by either a car or home stereo system. -- Wired Article
iPod, a portable hard drive for music that will feature a firewire connection for extra-fast data transfer. - HitsDailyDouble
Apple apparently is not planning to introduce a portable MP3 player, but something more sophisticated such as a component for a home digital stereo system - CNet
Per MacOS Rumors, the device may utilize a combination of acquired/dormant technologies including Raycer Graphic's GPUs, InkWell (hwr recognition), and/or Gigawire. As well, integrating the work of the iTunes and Quicktime teams.