"Inside Steve's Brain" author Leander Kahney of Wired magazine is reporting a programmer source inside a major software house has revealed that the next generation iPhone 3G will thinner -- we're talking Paris Hilton thinner -- by a whopping 22%.

Not only that, it will sport better battery life than the already impressive 8 hours talk time of the first gen model, and twice the NAND flash capacity, topping out at 32GB. (Paving the way for 64GB iPod Touch's?)

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Still not enough, echoing Kevin Rose (historically not the most reliable of iPhone prognosticators), Kahney thinks the phone may be heavily carrier subsidized -- down to the $200 level in some cases -- in an effort to put the hurt on Blackberry.

Okay, fess up, who left the rumor mill jacked up to max?!

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