Bull$4!t
There is no way that this is going to happen.
1. While I can appreciate the drive to make a new apple TV a small device, imagine a stiff HDMI and power cable coming out of your iphone. Unless the phone was positioned at just the perfect angle, the lightweight device would not have enough heft to force the cables to bend, resulting in a hovering iphone. Unless the new devise has a mount (or duct tape as somebody mentioned earlier), this thing would not sit properly in a media cabinet.
2. I have literally spent thousands of hours ripping, encoding and meticulously tagging my movie collection, and given my luck, Jobs is going to let the apple tv die a slow painful death to ensure that all of my effort was in vain. I even got my wife to love the

tv.
Anyway, I think everything I read about this updated apple tv sounds absolutely awesome, and if it happens, I will purchase 3 on the first day they are available, but I am not going to hold my breath.
One thing I do wonder, in the event of cloud based storage, which I would totally sign on for (even for a monthly fee), would I be able to upload things of mine, like home movies I have encoded. That would be a big plus for me.
That's my $0.02

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