Google entering into this space is a non-sequitur for me. I get the connection with Motorola Mobility, a recent purchase. But, Google has never really been about hardware. They would immediately jump into a crowded space with no history.
I am going to chalk this up to rumor until I see the press release.
[Update] It looks like there may be more to this story than I initially believed. Consumerist.com is reporting that Google has already created these devices, made an initial filing to the FCC and has shown off prototypes (last year no less). I still want to see it first before I believe it, but it appears closer to reality than most Internet rumors.