It looks like a Xbox 360 Slim is coming up, from Microsoft. Images prematurely released in an Italian advertisment show the new console, and were posted up on the website ConsoleTribe.
No price has been disclosed for the new model, but it will have built in WiFi and a 250GB HDD apparently.
It is somewhat surprising to hear that they are going to call it the Slim -- after all, the PS3 Slim has been out for some time now. I would have called it the Xbox 360 Skinny myself. Hopefully, with this small of a case, over-heating will not be a problem. We all hope that Microsoft learnt the lesson about the importance of proper cooling over the whole red ring of death thing.
Neo's Akira tells me that the slim will be $300, and it launches today. Apparently everyone in the audience of the Microsoft announcement also recieved a free Slim, which is quite generous of Microsoft.