MacWorld predictions (and the parallel tracking of the options “scandal”) are growing ever more frenzied, and even starting to overlap, with a pronounced “Chinese whispers” effect, even stronger than usual. I’m not a lawyer or stock/options expert, but my bogometer just about pegged. Frankly I can’t see how Steve Jobs resigning (or even taking some time off for “health reasons”) would help Apple stockholders in any way. FWIW, I think nothing serious will come of this… and I’m not selling off my AAPL stock before the keynote.

Looking over the spate of recent rumors, it struck me that it’s very likely that a future small Apple device would feature an “embedded” Mac OS X. After all, embedded CPUs are constantly becoming more powerful, and RAM and flash memory capacities on embedded devices are also growing – and Unix-like OSes are known for being well-suited to embedding.

At first glance, Mac OS X is a huge beast. You need several gigabytes drive space for a normal install, and half a gigabyte of RAM is now standard on Macs – meaning, double that is the minimum for serious use. However, most of that stuff is necessary for general use. If you look inside the system folders you’ll see tons of drivers for all currently supported hardware configurations, tons of frameworks for all sorts of applications, and lots of extra apps and utilities.

In contrast, any embedded device running Mac OS X would have a stripped-down version of the kernel (most probably supporting only one CPU), the exact selection of drivers and frameworks needed for that device, and one single application controlling the user interface. Supporting additional applications would be relatively easy once their focus is defined. Looking at it in another way, this describes the original Mac very well… and it had 64K of ROM, 128K of RAM and 400K of disk space. That’s much less than the iPod has, of course.

So how small could Mac OS X be squeezed in order to fit into the iTV, or into any rumored handheld Apple thingy/paradigm smasher? That’s hard to say. Offhand I’d estimate 64 to 256MB of flash memory, anything from half to double that of RAM, and that without raising the price too much, given the volume discount Apple could get.