AppleInsider has found a recent patent filing, presumably by Apple in conjunction with some select 3rd party manufacturers, that describes a device that can "compress, enhance, encode, transmit, decompress and display digital video images in real time." The device depicts a modified 1G/2G iPod with a color display with a headset hooked up to the traditional headphone jack and a video camera hooked up to where the remote jack used to be. There is also a infrared port on the bottom right for wireless connection to an optional A/V module that could enclose a speaker, camera, microphone, and additional display all in one.
While certainly interesting, there has been no additional information that has shown Apple is actively seeking to bring such a device to market. Also depicted via photograph, but not discussed in the story is a cell phone showed to also include video conferencing capability. It is not known if this supposed to reference the rumored "iPhone."
Updated: Macsimum has an in-depth article on the patent.