According to MacNN Apple filed a patent in March 2006 for a "Multi-functional hand-held device, the patent was published on 7 September 2006 by the the US Patent & Trademark Office.
The new patent puts even more attention on Apple's "It's Showtime" media event scheduled for Tuesday 12 September 2006 as it implies that Apple is prepping an smartphone product (finally, the alleged iPhone?).
This would mean that in addition to announcing downloadable videos from The iMovie Store next week Steve could (literally) pull a "One More Thing" out of his pocket. Granted, the iPhone speculation has been swirling for years and the patent may have nothing to do with Tuesday's announcements.
While telephony is mentioned in the patent it also discusses a unique, changing UI:
Before a particular device functionality can be used, it typically must be selected for use. The selection can come in a variety of forms. For example, the selection may be made via a main menu that includes soft buttons or icons that, when selected, activate the device functionality associated with the soft button. During activation, the GUI for that particular device is brought into view on the display (see FIGS. 9-17 - below) and the software associated with the device is installed, loaded or activated. From that point on, the multi-functional device operates like the selected device.
Like all Apple patents the filing is littered with almost every conceivable technology and buzzword, it still makes for an entertaining read. My bet is that iPhone is still on the back burner and that Tuesday will be all about the movies.