The WSJ featured a story a couple days ago that is still a hot read. According to the report Steve Jobs, who took a medical leave a couple months ago is still involved in new product development working from home.
The WSJ sources claim that Steve Jobs is working on a portable device that is smaller than MacBooks but bigger than the iPod Touch. This description just leads to the ever so long rumored Apple netbook aka MacBook mini. or even longer rumored Apple Tablet PC.
Steve Jobs is still expected to return end of June to Apple.
Since Apple is having a lot of success with multi-touch I could imagine a larger iPod touch running OS X to be a cool device, but it would be rather niche. I am not sure if Apple still wants to do niche products. With the success of the iPod and the iPhone Apple has reached the mass market.

If Apple is releasing a netbook or a tablet PC is basically not really that important these days. All eyes are set on the new iPhone 2009.