Confirmed, like back in August when everybody thought the Wiimote would have 3d motion sensing and 1:1 mapping of everything you did.
Where the hell is the source for this anyways? "They’ve already confirmed a DVD-playing version of the Wii is in the works", when you CONFIRM something, you're supposed to provide SOURCES, otherwise you're just BULLSHITTING
Edit: Ah, I see, GotFrag is their source (some company I've never heard of), and GotFrag's source is some freaking Toys 'R Us manager. I don't believe it for a second, but hey, if you believe it, I have some snake oil you might be interested in.
I sent an email to Nintendo asking them in detail about this, I'll post the reply as soon as I get one.