This is definitely happening. I don't know about spring 2007 specifically, but they're redesigning it. I reported on it back in April (
http://www.shacknews.com/onearticle.x/41595/ ) and my source is very reliable. The details are slightly different--ie, flash memory rather than hard drive, but flash memory makes more sense anyway. The difference is that my source claimed the new device may not use UMDs, but I wouldn't be surprised if that was changed due to impracticality.