The user interface seems quite intriguing as well. In a brief video demonstration the Courier appears to mix multi-touch elements from the iPhone with traditional stylus-based handwriting and drawing and Zune graphical elements. The device is reportedly in a "late prototype" stage and being developed by a group within Microsoft's Entertainment & Devices division -- also responsible for the Xbox, Zune and Windows Mobile.
Gizmodo promises additional information in the coming days. For now, you can check out the Courier's demo video after the jump.