yes, eventually, iPod must evolve and what you said will probably happen, so i agree on those points.
i agree about the decreased size, longer battery life and lower price. those are universally good things. adding functions beyond being an mp3 player, however, is up to debate, as i happen to believe one of the best things about ipod is that its simplicity of being primarily an mp3 player and handling that function extremely well. (i know you didn't suggest that, but i'm now responding to the earlier posts...)