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It would be great for fans, but suck hard for general consumers. Take me for example. In 2004, I picked up a 20GB Gen3 as my first iPod. Two weeks later, Apple comes out with the brand new version with a vastly improved battery life. So it was back to the store to "upgrade". Now, about two hours before this news hit the net, I picked up a 30GB Gen5 to replace my 20GB Gen4. If the rumor is true, I'm strongly considering returning this and waiting a few months.
If I were a fan boy who loved blowing my money on anything Apple pushes, I'd be a pig in s**t right now. As a person who buys his iPod from his local Wal-Mart, it sucks that the new toy I just picked up picked up could already be outdated by a version with better features, improved battery life, etc.