There were photos of that with a real hand though... A guy was holding it and it looked just like that one... One huge touchscreen, the wheel is inside.. I'll get the pic later...
Edit, might be fake... But who knows
Edit again. It's fake... From wiki
This rendition of a Video iPod was distributed five days prior to an Apple media event to take place on February 28th, 2006. It was originally posted to Flickr and triggered much discussion. The author later released a video showing steps used in photoshop to create this fake, although the iPod in that video differed slightly from that in the initial rendition. However, G4 TV's Attack of the Show has admitted to creating the video, only to show that if it was fake, it would not be difficult to create. However, they did not create the original image, so its status is again in dispute.