That's the rumor. And I hope it will put the iPhone in it's belly. Here's the Wired article, and a link to a blog entry with some details:
"Other tidbits that I'm trying to recall based on questions I've recieved from readers:
- It's a modified Linux kernel
- There is integrated GPS and GoogleMaps
- (there were other things, I'll probably update this list once my memory is jogged by conversation during the show)"
Laptop Logic has a brief article which brings all of the rumors together and pieces together what may (or may not) be in store for the cell phone market in the next few months. The key words here are open, cheap, and Google. I'll be first in line!