That rumor, posted to MacDailyNews this past June, generated quite a stir among Apple (AAPL) watchers, but nothing ever came of it. But new reports suggest Apple may have just such a device secreted away somewhere deep in the bowels of Infinite Loop. TechCrunch claims as much, reporting that “three independent sources close to Apple” say the company is working on a largeish iPod touch that features a seven-to-nine-inch screen. One even claims to have handled a prototype and says Apple is working with Asian OEMs to bring the device to market in late 2009.

Now like all Apple rumors, this one should be taken with a grain of salt, if not an entire salt lick. That said, if it proves true, the device described could be quite the game changer–especially if it supports handwriting recognition (entirely possible given the Chinese character recognition system already on the iPhone). As I said back in July, “a finger-as-stylus touchscreen Mac tablet would make a hell of a nice counterpart to Apple’s new MobileMe service, wouldn’t it? It would make a great e-book reader too–if Apple ever gets around to adding a bookstore to iTunes. And if Apple were to link it up to iTunes U, as it undoubtedly would, the Mac tablet might even become higher education’s killer app…a notebook, a textbook AND a MacBook–all in one.”

[Image credit: Flickr/ John Ellenich]