Details provided by 9to5Mac.com include a tie into MobileMe that handles much of your personal file sharing and server needs, but through a MobileMe.com URL that would make your account accessible anywhere. The device would also serve all iTunes media, and be able to specifically serve media out to your iPods and iPhones.
Lastly, it would incorporate current Time Capsule features such as Time Machine backups and wireless routing.
As with all rumors, The Mac Observer’s advice is that a new Mac, iPod, or even Time Capsule on your desk is worth two on a rumor site.