Apple will never make a laptop that is that size because it would mean that they would have to take out the optical drive and make the computer ultimately worthless without a docking station. Apple will never make a computer that isn't fully capable from the start.
First of all we're in 2006. Optical-less laptops don't require a "docking station". We have FireWire and USB external drives now, nothing special is required.
Second, Apple already has a very successful product on the market that also requires a "docking station". It's called an iPod. Without a computer an iPod is useless. You can't rip things directly to it.
And third, as mentionned, we're in 2006. Honestly, the only times I use the combo drive of my Mac mini is when I play Starcraft, Diablo II, rip music CDs with iTunes or encode my DVDs to H.264/AAC with HandBrake. That's all.
I would sell my 12" Powerbook in an instant if Apple ever made a light sub-laptop. Even a 13" Macbook is too big IMO. The laptop being my second, portable computer, I want it more portable than a "desktop replacement".
That's how I see it anyway.
As for the new specs of the Macbook, if the rumors are true, then I hope we can expect the Mac mini to be updated with the exact same specs in about a month or so.
As for heat problems with such a small laptop, well, no one is forcing Apple to run the processor(s) at their full speed. An Intel Core 2 Duo that's about 25% slower would still be about 50% faster than a G4 I guess (if we take Apple's marketing numbers) but could require half as much power (better battery life, lower heat dissipation).