Seth Weintraub of Computer World writes...
The timing? Well, if this thing has to be put on a device in late Summer, Apple will probably want some software to run on it...probably even an App Store. If so, developers will need at least a few months to get their apps to run on this new little device. That means they should probably start right about now.
Then there has been the persistant "premium app store" rumors. Paying $20 for an iPhone app seems silly. But if an Apple tablet (or AppleTV?!) can handle hi res 3D gaming, it might make more sense. Current App Store apps should also run on it but in a resolution independence type of mode.
Weintraub believes the device will use the ARM Cortex A8 architecture and the video card will be from Imagination and hopefully use some OpenCL.