It must be something really big, Think on the scale of the iPad, maybe even bigger.
I doubt it. I'm leaning towards those who are saying this is going to be an all-software/services affair. I suspect they will unveil their revamped MobileMe/iCloud/server farm/whatever it is. Or MAYBE preview the 5th-generation iPhone (which seems unlikely to be a huge leap). A new hardware line is the most improbable.
I think that there is still lots of cool stuff that can be done with iOS 5: notifications, multitasking, navigation, voice, file sharing/syncing are all areas that can be improved upon significantly. That, and I'm hoping that there is something secret and cool to be revealed about OS X Lion. When Leopard was first previewed, they didn't even show the new Finder, Stacks, and those UI changes. They've gotta have SOMETHING cool for WWDC, right?!