Is Apple making an iPod "Stick"?

It's still two whole months until MacWorld, but already the rumourmill is billowing smoke.The web has been alight with tales of an Apple search engine

The web has been alight with tales of an Apple search engine, although we're piling the pinches of salt on this one. (It's been suggested that what Apple is actually working on is a nicely designed package of integrated search services into existing user interfaces).

What's more interesting, however, is an anonymous tip-off we've had concerning the development of a new iPod, codenamed the iPod "Stick".

Now, this might seem a little unlikely, given that we've just seen the release of the new nanos and updated Classic and Touch, but our tipster claims to be an employee of Apple and has previously given us the goods on the PAYG iPhone before everyone else.

He claims that features of the stick will include: WiFi, Multitouch flex display and, er, a 7MP camera.

An interesting development or the rantings of a mad fanboy? Have your say below...