I've never been an advocate for a device "that does everything". The iPod is primarily a music player - that's its purpose, and so it does that very well. People get one so they can escape and listen to their favourite tunes on the move, maybe while doing something else. As soon as you add more and more things it becomes a jack of all trades and a master of none.
For instance, the all-in-one set-top-box has never really happened. And prior to PS2 and Xbox release, everyone was talking about how people were going to do their knitting on a PS2. In reality, some people watch the odd DVD on them but most just play games. And most people have a better quality, dedicated DVD player so they watch movies on that instead of the PS2.
I like Nintendo's philosophy, and it's similar to Apples. The GameCube was designed just for games. It may not be the number one console, but it certainly does what it says it does very well. Just like the iPod is in its chosen field.
Another example is my phone. My one can make calls and I like it because it's small. I don't care for playing games on it because I have a Game Boy for that. The Game Boy is infinitely better at playing games than the best phones so I can use that. And my phone is smaller and has more battery life because of it. After all, I don't want to play games absolutely wherever I go so I don't need to take it everywhere on my phone.
If the iPod had all these new complicated features, a colour screen, and had an in-built DVD player it would have to be bigger. This would then compromise its ability to be a small and best-of-field music player (including less battery life). Most of the time you don't want to watch a movie - and, as Jobs said himself, there's no substitute to headphones with video - you're stuck with a tiny and low quality screen.
Therefore I don't expect the new iPods to be very different to the current. Maybe video out capabilities (why not?), and maybe a face redesign (similar to the iPod mini and ironically the 2nd generation iPod) and higher capacities. As soon as you start putting on touch screens and stylus pens or colour monitors and flash card sockets, it becomes one of those useless jack of all trades but master of none things and suddenly you've lost the reason to own an iPod in the first place. Remember, escapism.