We've known for quite a while that the IM solution would be based on Google Talk - there were slides about it at an earlier open source conference (which I can't seem to find at the moment).

Some thoughts:

• If the 2006 OS is imminent (for consumers), Nokia are shooting themselves in the foot. They must pre-release it to developers via maemo.org on a beta-programme, otherwise there'll be no third party software at launch due to the ABI and API changes.
  
• Releasing a new device (either as a successor or sibling to the 770) would, IMHO, be a mistake too. Developers are going to have enough fun porting existing apps to the new API without having to test on devices they don't have. Pissing off existing developers by releasing something more powerful/featureful would be achieved by effectively diminishing the investment early adopters have put in.

Personally, I'd guess that the update is only software. Wishful thinking time: any QWERTY keyboard option would be best provided through a new shell-based accessory plugging into the USB port, rather than a whole new device.

Cheers,

Andrew