We are about 6 weeks away from the WWDC 08, were Steve Jobs is expected to unveil the 3G iPhone. This will be tough weeks as rumors surrounding the next generation iPhone already reach very high levels.

Initial rumors that the new 3G iPhone would be thinner got more confirmations with new rumors appearing yesterday. Additionally new rumors from Taiwan Economic News, Via AppleInsider even talk about a more compact iPhone with a smaller screen (2.5 inch instead of 3 inch) and less weight.
I really do not think that Apple is dramatically changing the iPhone this time around and believe more the predictions that it might a bit thinner and feature a GPS chip and 3G and that is it.

The hottest rumor kicked off Fortune writer Scott Moritz yesterday. He claims that AT&T might subsidize the new iPhone with $200 bringing the cost of the 8G 3G iPhone down to $199 with a new 2 year contract. Well, that would just kick open the flood gates very wide and Apple would sell crazy numbers of the new iPhone. More details on Fortune. Via Macrumors.