Digital video on the iPod?

Just a question on feasibility...

Does anyone think that Apple could release a new firmware upgrade for the iPod that could give it the ability to play digital video (i.e. DivX, MPEG-4, etc.)? Granted, it would be in black & white (grey scale) and be very small, but do you think it would be technologically possible? If cell phones can do it, then I don't see why a device with a 40-gig hard drive can't do the same? Granted... I wouldn't want to watch the lord of the rings on the iPod's screen, but maybe music videos, etc. Any thoughts?