Yeah, the mock-up didn't impress me either.. but that's all it is, a mock-up.
It's strange... thinksecret is usually really good with rumours, so I'm hesitant about dismissing it, but you're right, it seems like a step backwards in functionality.
Apart from the iPod stuff, what TS said about the Music service sounds good - wide range of artists, and 30 second previews.. nice 🙂