I have a hunch the next generation iPod will have a widescreen. I just don’t think the current 4:3 screen is going to be around for long. Obviously the videos on iTunes are a success. The next step is to deliver them in 16:9 format, and then possibly deliver full movies as well. This could happen as early as next year.
Updated 2/4/2008: Well, it didn’t happen in 2006, as I’d hoped. Appled started selling movies through iTunes in 2007, and now, in 2008, has started renting movies online, in both HD and regular formats. They also started selling a widescreen iPod in 2007, not 2006.