Sources close to Microsoft have apparently leaked that a large touch screen device, either 7 or 9 inches in size could be released in Q3 of 2009. These sources have apparently seen the prototypes with their own eyes and mass production is under way. Steve Jobs has been working and scrutinizing the device until perfection over the last year or more the sources say.
Only time will tell if the rumors turn out to be true but we would expect the device to range from $500 - $600 USD if it were to hit the market.