I think it is going to be an iPod Touch with 3G, a video camera and OS4.0 for ~$300. I haven't heard any rumors of it yet, but I think it can be disruptive.
What might actually be disruptive is if they made an iPod Touch with phone capabilities, expanding the market by not requiring a $30/mo data plan. Even better would be if the data was available but optional and plan-free, like the iPad.