I don't see how it can be thinner, better battery AND 3g/GPS. Something has to give. /QUOTE]
But the battery life is the issue. Thinner means smaller battery. GPS and 3G mean larger drain on that battery. It doesn't add up.
First of all, If the claims of better battery life is true, Then I'd surely bet that there will be an asterisk next to the claim that points out that the stated battery life is measured with WIFI, GPS, Forward-facing cam, and potentially even UMTS/3G disabled.
But at the same time, a lighter/thinner 3G iPhone with better battery life is not necessarily wishful thinking. With regards to hardware improvements, people need to remember how fast integrated-circuit technology moves, particularly in microprocessors, embedded systems, telecommunications, etc. Since the first iPhone's parts were sourced, embedded chip manufacturers have moved to smaller processing nodes, with many chips going from 110/90nm down to 55nm/65nm. This leads to smaller die sizes and better power efficiency.
There are also always continuing advancements in chip integration and optimization. For communications, Maybe iPhone 3G has a special SoC ARM processor that not only is more power efficient from a die-shrink, but has improved architecture and algorithms. Maybe the iPhone 3G uses an advanced baseband chip that is smaller, yet includes UMTS, WiFi, and GPS all on one chip and thereby saves significant physical space which and allows the iPhone to be thinner, but have a larger battery at the same time. All I'm saying is that most of us don't know enough to be able to accurately predict whether they can pull this off the type of improvements in the rumor or not. We need an experienced mobile phone/embedded systems engineer to comment on recent developments in this technology area.
One final thing to think about that someone else mentioned in this thread is that Apple probably didn't use the smallest/most power efficient/most modern components available, so as to save some headroom for iPhone v2 improvements (and reduce costs).
The battery will be an issue. Talk to anyone with a 3G phone and they'll tell you how fast actually using 3G drains the battery. the new iPhone is supposed to have an option to turn off 3G, which suggests that there's no quantum leap forward in battery technology. They're simply adding the 3G technology that many have been clamouring for, and giving you fair warning that you'd better not stray too far from a power supply with it fired up.
Well I have had a few different 3G phones, and it really comes down to the model. There are many that have *terrible* battery life in the 3-3.5 hour talk-time range, and there are those that have 8-9 hour talk-time. We'll just have to see when it comes out, but it is good that Apple let's people voluntarily restrict their phone to GSM/EDGE to squeeze more talk-time out of it. Most UMTS chips use more power when in use for voice/data than GSM chips, but they are actually a little bit more efficient while idling.
My concern is that it will come with the GPS module but to actually make use of it, you have to buy GPS software from a third party such as Garmin.
Highly unlikely, at least for basic access through Google maps, et al. You may be correct in regards to full-featured "3d view" navigation software akin to that on automotive GPS devices. However, I wouldn't doubt that Google has something similar in the works for android that may end up on the iPhone as well. Or something that Apple will include in the new iPhone OS. I'm sure Apple and google could team up and make a sweet-ass GPS navigation app!
Am I the only one that really doesn't care about GPS? I mean honestly I don't see a PRACTICAL use for it. I'm not going to be staring at my iPhone while driving, and it's certainly not going to top the features of a Garmin. Ok, geotargeting pictures or something, wonderful.
Um, yes, I think you are. No, but seriously, I think you are underestimating all of the possible applications. GPS is certainly not just useful for interactive driving directions, although I'm absolutely sure people will use it for that with a dashboard iPhone mount. GPS is great for quick retrieval of
location-based information when you are out of town on a trip. The first thing I do when I get to a hotel room or friends house in a new city is look up google maps (over WiFi on my ipod touch) and check out where I am at relative to everything else --- areas of interest I will want to check out, restaurants close-by, movie theaters, seedy porn shops

, etc. The same thing applies closer to home if you live in a large city and are trying to find something.
GPS positions can also be shared among friends and family, allowing crazed overprotective mothers to track their children around town or keep them in a certain perimeter, among other uses. And the commercial possibilities of so called "location-based services" are going to be huge during the next decade.
I don't see a use for a GPS chipset in a phone. If you have cellphone coverage, it should be possible to triangulate your position thru cell towers. Good technology if you are out in the boonies, but for most in North America, not needed.
HAHAHA! Are you saying most in North America don't actually live "out in the boonies"? I know that of two phones I've had with google maps, neither has been able to get a location in any city I've been in. And besides the fact that cellular triangulation is never going to be suitably accurate, you surely don't want the cellphone companies controlling the positioning services of your phone with so-called A-GPS or whatever. Look at Verizon for god sakes, they CHARGE $20/month just to get cell-tower assisted GPS directions. Rip-off! I want an actual GPS chip that I can control, and for which I can always have different software to use it with.
There is no GPS support in the iphone OS 2.0 betas so I am 97% certain the new iPhone won't have a GPS and it will continue to use the cellular and wifi technique which is faster and works indoors.
I'm 97% sure that it was already reported that extensive references to GPS and location services were found in the new firmware code. The Cellular/Wifi technique sucks because it only works in major cities, and even then only in certain locations. I sure haven't been able to get it to work well with Google maps. Also, you want a GPS chip so that any standard software application will be able to use the coordinates, and it will always be much more accurate, good enough for real driving directions.