This week's iPod rumor: that it'll have direct audio encoding

This week's next-generation iPod rumor is that it'll have a microchip for encoding audio files with the iPod itself. Not as a big deal as having a color screen or being able to play videos, but it does mean that in addition to being able to transfer files over from a computer, you'll also be able to hook up your iPod to a CD player or turntable or radio and create AAC audio files (which is the digital audio file format Apple uses) on the fly.