The rumor might be based on little more than an upgrade delay, in turn due to Intel being slow in getting out the next generation Xeon processors.
But selfishly, I would be happy with a far smaller box, almost Mac Mini sized if possible, with just the workstation level processor and RAM capabilities and a replaceable graphics card. For the rest, like extra disk space, optical drives and such, Apple could satisfy me by having a line of matching Thunderbolt peripherals, perhaps stackable under the main unit.
I would guess that many (not all!) MacPro users are like me, in wanting the processing power, but having little or no interest in four disk drives, two optical drives, two ethernet ports, or multiple expansion card slots. And we pay a huge premium in cost and space and weight and pain hauling the gear around just for that processing power. The latest quad-core i7 Mac options have probably lured away a substantial fraction of these former Mac tower unit customers.
Myself, I have all 4 drive slots populated - two for system and backup, and two for library and backup. If a drive dies, yank it, replace it, dupe it. Down time is about 5 minutes. Only need the one optical, but plenty of doodads like card readers, or even another drive, can go in there. As it's still a USB world, I added four more fully powered ports to the back for those pesky devices that don't play well with hubs. Theres also more slots to add ESATA, Firewire, or maybe even Thunderbolt in the future. Want a beefier vid card, no problem. Heck you can run two. Only have 10GB RAM at the moment, but can stick a bunch more if wanted. Yeah, it's a beast, but it doesn't get moved much. That's what a laptop is for, which you still need to hook to a decent monitor for critical work.
These sort of rumors have been around almost as long as the company. Not too worried myself, as they make good stuff. One of the benefits of the size of the Pro is there's lots of room inside to dissipate heat, coupled with an excellent fan system. If you picked up a new one today, there's no reason it won't be chugging away twenty years from now. I've got a Cube that's still used for reading repair manuals and watching the ocasional video. Sure, it's pretty much as slow as when new(has been hotrodded a bit and stuck in a Newertech cabinet), but still serviceable.
What with the new low power CPUs being developed, like the i7, as well as Thunderbolt and SSDs, hopefully it'll just morph into a smaller package with the same expansion capabilities.
If the expansion is not a concerne, there's always the i7 Mini or iMac. Been eyeing a 27" one myself, as it's not much more than the cost of a comparable monitor.