Shaw Wu, analyst for American Technology Research noted to clients earlier this week that he believed that there was a 50/50 chance that Apple will introduce a new form factor multi-touch device at WWDC.
Our sources indicate 4-inch and 7-inch touchscreen devices beyond prototype stage that are a cross between a Mac and iPod touch.
On a similar note iLounge published photos of what is claimed to be new 3.2-inch and 2.8-inch displays set to be used in future iPhones.
iLounge notes that suppliers of Apple components rarely confirm that they're working with Apple and for this reason is sceptical about the images but continues:
the first pictures and diagrams of a touchscreen display that a Taiwanese company claims is being used in an upcoming iPhone. It’s a 2.8” display—shown here alongside a newer 3.2” version—two sizes that would enable Apple to start shrinking both iPhones and touchscreen iPods from the current 3.5” screen size found in its first-generation models.
iLounge believes there is a "zero-chance" that the new 2.8-inch display will be used in the 3G iPhone expected next week but considers it possible that Apple will release further additions to the iPhone lineup in the future.