Yeah, that whole report is a rumor hat was proved to be false. The "2G iPhone" that they got more details on is merely a glossy black case on a 1G iPhone, which accounts for the thickness. The other features are just speculation by analysts, and are proof of nothing.

Gizmodo Wrote:The first allegedly-leaked shots of the 3G iPhone arrived earlier this month. Yesterday, Engadget claimed that the iPhone was going to look all black and shiny, like in the photo. (Although they didn't say that was a photo of the said unit.) Today, what wee know for sure is that the thing in the photo is just a protection case available for the current iPhone out of Hong Kong. While it's logical to assume that 3G will be in the next iPhone, wee still have to wait to see if its all-black color, the GPS, or any of the other predictions are true or not.

Source: Gizmodo