I haven’t heard that either, but even if they did (which I suspect they will) it will probably just be a more streamlined version of the existing console. Sony has done this a couple times, as has Sega. No “brand new” console, just an updated (IE-Cheaper to build) version of the old one.
“Do not be angry with me if I tell you the truth.” --Socrates 
And aren’t you supposed to be seeing Attack of the Clones for the fourteenth time or something? Get outta here, ya Microsoft pimp. 
I have read the news about the new version of the Xbox on a few Dutch gamesites.
There is a big difference between the version-changes of the PS2 and the proposed changes of the Xbox. The changes on the PS2 have had to do with the changing chip-technology. If you can combine two chips into one, you will save a lot of money, but the technology stays the same. If the Xbox gets a new version with a new processor or videocard, there will be compatability issues with the older version. Newer software won’t have any problems, but older software will need patches to run. Plus, in the development of new games they will have to take into account that both versions of the Xbox should work, which causes extra code, which causes slowing down of the software.
Now, I don’t know about you guys, but I bought my console so I wouldn’t have the hassle I had with my PC with drivers, upgrades and patches. Therefore I think it will be a bad move for MS to build a cheaper version of the Xbox, but in all fairness, they probably don’t have much choice if they want to compete with Sony and Nintendo.
I will try and see if I can find a link to an English language site which has the information about the new version of the Xbox.