Rare's Creative Director, Gregg Mayles, has tweeted a design document for "Velvet Dark" (labeled "Velvet").
He hasn't provided any details about development, such as whether Velvet Dark made it past the planning stage, and he hasn't provided any insight to the contents of game itself, but it can be expected that elements were probably incorporated into Perfect Dark Zero.
In Perfect Dark, Velvet is the sister of Joanna, the game's protagonist.
The most interesting thing about this design document is the mention of Game Boy Advance compatibility, despite Mayles stating that this game was in development for Nintendo 64. This could be a mistake, but we should remember that Rare were pioneers of their time and not averse to trying daring new things.
The tweet
The follow-up
EDIT:
I'm not sure if that is the date next to the title, but if it is (30th October 2000?), then perhaps the reference to N64 development is incorrect.
Though Banjo-Tooie spent just 2 years in development, so it's possible that Velvet Dark would have started as N64-bound and released just after Conker's Bad Fur Day, if it would have seen the light of day.