Apple's the market leader, so they don't get to take big risks on things like the ipod. they have little to gain and much to loose, and it could be really bad publicity, too. Everything people know about from apple these days is a success, except perhaps the ipod photo, but they've hidden that one well enough.
And, remember, an ipod video is a risk. Nobody really knows if people will want to watch on such a small screen, if people even want portable video, b/c you aren't going to do it while jogging, now are you? And if they make a large screen, it's a lot of money, a lot of risk, a lot of lack of portability, and a serious embarassment if it fails.
Oh, and most important.... remember when other portable video/mp3 devices were coming out, like 6 months ago, and we were all a little nervous the ipod would lose it's crown? Lots of hype about them, and speculation that apple would join or die? Yeah, who's even seen one of those devices, that bill gates himself said was the wave of the future.
Like with the ipod, apple is going to wait until the market is on the cusp-after a decent selection of video players become available, when bandwith and storage reaches levels that can easily support video, and they're just starting to reach the mainstream. Then, look at what's out there, and how it should be better. Make it right, but do so just before the market takes off and just before other quality devices get out there.
That's apple's plan. There will be a video capable ipod, but it will not be now. Only techies own video players now, and that's not a big enough market.