That's right, a new model of iPods has been released by Apple.
http://www.apple.com/ipodmini/
As you can see they are smaller and come in different colors. Early rumors said that this would be a cheaper iPod, but Apple disappoints and makes it $249....it also holds 4gb of music. Apple also got rid of the 10gb model and brought back the 15gb model for smallest size of the larger model.
I think it should be interesting to see how this smaller model does.
Added:
http://www.tombridge.com/photos/ipodmini/