A couple of months ago we reported on rumors regarding the 4th generation iPod. As you may also remember, we did some digging and confirmed that the chipset that powers the iPod does have the video capabilities that were rumored to be included in the new iPod.
Now AppleInsider has a source that largely confirms and clarifies the rumors. Essentially, the upcoming iPod will have a color LCD, will display photos and will have video output capabilities, with this caveat:
According to the source, who has reportedly toyed with a 4th generation prototype, the player may not sport a video output jack per se, but rather a greatly advanced dock connector. The feature is said to greatly utilize a much improved "Home on iPod" Mac OS X software technology, which is still under development by the iPod maker.