The new device was developed with positively Apple-like secrecy.  Only a handful of engineers worked on or were aware of the device, whose development was led by Microsoft's Entertainment & Devices tech chief and user-experience chief J. Allard.  The device is almost finished, with Microsoft currently refining the user interface experience of the "late prototype" and showing it to outside agencies.

The "Courier" touchscreen prototype features a book-like design with two 7" screens -- kind of like a jumbo Nintendo DSi.  Both screens support multitouch, and you can write with either your fingers or a stylus.  The UI features traditional multitouch flair like flick gestures to trigger actions.  The GUI has battery and wireless signal indicators by the rim of one of the screens, keeping them unobtrusive.  A particularly slick aspect of the UI is that images can be moved to the hinge "pocket" to transfer them between screens with ease.

The device also features a built-in camera on its back.  As no wires were seen, its rumored to charge using induction, somewhat like the Palm Touchstone charging dock for the Pre smart phone.  Overall the device is smaller (7" vs. 10") than the expected Apple device, but features a very slick and chic look.  Expect the device to potentially take on e-book readers like the Kindle as well, as its interface seems perfect for reading on the go.

As with the Zune and Xbox before it, the Courier seems to be advancing rapidly through the phase of Microsoft seeking outside help to round of the device's features, software, and to develop service packages for it.

More details are forthcoming on the product.  It seems that with the release of the much-anticipated Zune HD, Microsoft's hardware division is eager to keep on a roll.