With Macworld fast approaching, the rumor rate should begin increasing exponential. iTablets will be hot once again, of course, as will the iPhone Nano. Says MacRumors:

[iDealsChina] claims the product will be announced at Macworld San Francisco 2009. iDealsChina, however, has a very mixed track record. In August, it passed off renderings of knock-off iPod clones as the real thing and also claimed that the new iPod Touch would have GPS (it did not). The site, however, did previously have access to Griffin case moldings that appeared to be real. The sizes could correlate with smaller touch screen photographs that iLounge published in June.

MacRumors thinks such an iPhone Nano may break App compatibility with the existing iPhone and iPod Touch due to screen size and resolution. Shrinking the screen down using a higher DPI, like the iPod Nano would lessen part of the problem (though hitting tinier capacitive touch targets would no doubt be an interesting exercise in frustration).

What do you think? iPhone Nano for Macworld? And is it a Good Thing?