I personally hope that Canon takes some of the bells and whistles from the latest 650D/T4i and put them in this new body. Things like an articulating touchscreen, continuous AF in video and stereo mic. Put the whole thing in a package similar to the 7D with similar weather sealing and sell it. Granted, this might make the camera superior to the 5DIII in video (if they ended up having the same sensor) but will differentiate the two bodies.
I agree that touch "rotating-thing" is what Canon could use - but I doubt that, well, if this body has to fit between 5 and 7 series (mag-alloy body and some weather sealing).
As for continuous AF in video - that would require redesign of FF sensor - which means added R&D costs whish results in higher price.
...also this new body with all features you mentioned (mag-alloy, wheater sealing, flippy thing, touchscreen, dual mics) - it would be better in some way that 5D Mk III. No way that Canon would make such product.
Speaking of the Nikon D600, it is now rumored to include a 51-point AF system instead of the 39-point AF originally rumored. If true, then this makes me wonder if Canon can get away with a 7D AF? Maybe a few modification or a new AF between the 19-point AF and the 63-point AF would do.... perhaps something from the old 1D series (if it fits the smaller packaging, that is).
As for AF: Have you read all info regarding rumored Nikon AF ? That rumored AF would have 9 cross type points ?
Yes, 7D AF has "just" 19 points. The truth is they are all cross type (which means more precise). So yes, giving 7D AF makes sense. They could also re-use 1D Mk IV AF (and keep f/8 possible) - which has 39 cross-type points (and that would attract lots of people).