We've mentioned the idea of an external game controller on the iPhone (and now, the iPad) before, but this is the first we've heard of Apple working on one themselves. Apparently a new patent would cover applying buttons, joysticks, or direction pads to an external controller, something that would either plug in to the dock port or be included in a shell-like object that the device could slide into. This is very similar to the unofficial iControlPad that we've seen, but it would be designed by Apple. Apple is also working on some sort of head-mounted display system, and it's possible that these two things could be used in conjunction -- the buttons would provide tactile feedback, while the headset would bring in immersive audio and video.
This is all far in the future, and just because Apple nails down a patent on something doesn't mean it will ever be released to the public. As we all know, Steve loves the iPad and the iPhone because there is only one button, and it would likely take a lot of convincing, even for the game market, to get him to add more.
Still, games are getting more and more complex on the iPhone and the iPad, and sooner or later, buttons may come in handy for selling those games. Apple may not be working on an actual console, but they may be working to make their current hardware more accessible for traditional gamers.