I wouldn't go so far as to say new models, but think there will definitely be hype about the SDK. Perhaps some demos from some upcoming 3rd party native software. At least I can dream right?

I dunno -- Expo's pretty much a consumer show, which seems like the wrong audience for a lot of info about a developers' kit.

well, it'll be out before the wwdc, so this would make it kinda the right time slot 2 start the hype. and, it may be a developer thing, but its huge with consumers 2. cuz, i kno i cant wait till supported 3rd party apps. and, u could bundle the sdk with consumer stuff if u focus on the actual apps. i mean, maybe apple made some more apps of their own. then, they could focus on them, and it'd be on the consumer side.

I think a 16GB iPhone is very likely because it's just a capacity upgrade. Nothing more. I don't think we'll see a really new iPhone model such as one with a GPS chip in January. But, what I also think is possible is a radical model update, but one announced for months into the future, like what was done the first time. That way you avoid giving buyers remorse to holiday purchasers.

There won't be an announcement of a radical update to come. That makes sense for the first phone to build hype and keep people waiting (I'm sure more than a few held off on new phones until the iPhone was available), announcing an update would just depress sales. An upgraded capacity is certainly feasible to keep up with the touch.

It's definitely going to be a 3G, and 16GB iPhone.
Apple has so much momentum right now, plus billions of dollars for R&D. I can't wait.

New iPhone apps installed via iTunes: voice recording, video - new features all iPhone users can enjoy and adds value.

Remember this: If apple announces a new iPhone model or upgrade, lets say 16GB and/or a 3G iPhone, they would have to let it go on sale ASAP after the announcement to avoid the current iPhone sales to litterally die out in the wait for a better and newer version of the phone.

Due to this I dont think they'll announce anything that current iPhone users cant benefit of...My guess would be one or a few new applications.

Summer 2008 3g, video projected,GPS,speach to text.

I hope the iPhone gets released in our country soon, PERIOD

I think Bailey is right about the 16GB but wrong about the price. I think they'll put a %50 premium on it and it'll be available in May or June. It'll be the second gen iPhone with a better headset jack and 3G

For current users, they'll have a game and some other productivity app to demo with the SDK and I think they'll announce that some versions of iWork will begin to work on the iPhone soon.

iphone movie rentals might be a big news item.

One or a combination of:
gps or some form of nav w google maps
voice input (dialing, memos, commands)
voice output (text-to-speech memos, reminders, alarms etc)

Do the marketing. Dilemma!

At least in the SF Bay Area, Apple has been able to get lead story on the nightly news just by making a press release about a dot release of the iPhone. (1.1.1) If you can get that much coverage with 1.1.3 and its features, whatever they are, I'd suggest doing it two weeks before or two weeks after Macworld. Maximize the press.

If Apple, presumably, has new products for MacWorld, they will get (deserve, need) their own PR and coverage without being eclipsed by a Google map improvement or search feature on the iPhone.

T'were I Apple, I'd probably put out 1.1.3 first week of January with whatever features are ready. Then I'd expect a couple of pre-seeded iPhone demo software announcements at MacWorld from trusted partners that didn't leak any ROM images. Then bring out a 1.2 that has the levels of security and file maintenance that are need for the SDK to work safely, probably in February.