Everyone's been talking about this Bloomberg story:
Amazon.com Inc., the world’s largest online retailer, plans to introduce the next version of its Kindle electronic-book reader in August, according to two people familiar with its plans.The device will be thinner and have a more responsive screen with a sharper picture, the people said, who didn’t want to be identified because the plans aren’t public. The new Kindle won’t include a touch screen or color, they said.
A new device is certainly possible, but I seriously doubt that it will be thinner. Speaking as someone who's had his hands on a large number of ereaders, I can assure you that there is such a thing as making a device to thin.
If you make a device too thin it will be difficult to hold. Users will be unhappy and they'll defeat your design decision by adding a padded case. In fact, I can give you an example of a device that was too thin: the Kobo ereader. Kobo made one critical change to the stock Netronix model when they chose it: they added a rubber back. This made the device thicker, and changed the way it feels to hold one.
Update: Someone sent Engadget a screenshot that shows a new Kindle codename: Shasta.The plot thickens.