Steve Jobs will announce a new 16GB, $499 iPhone tomorrow at Macworld.
Steve may be believing this, but others are infinitely less sure.
Anyway, even if only for the "makes you go Hmm" value, also said to be on the way in the iPhone universe:
Over the air downloads from iTunes store; software update 1.3, with the capability of running:
Dictionary (coming with 1.3 update) (quickly look up words, translate, use wikipedia)
Yellow/White Book (coming with 1.3 update) (search for contacts, add them to your address book directly from the app, will sync back with address book on your Mac/PC)
Sports Ticker (coming with 1.3 update) (choose your sports and teams, get updates on their progress)
Another partner: Twitter (update your Twitter on the fly, see your friends tweets)