My idea is based off of trying to figure out how to turn an iPod Touch into a DIY iPhone.
Basically the idea works like this. The "iPod Connector" is used for the microphone. This part of the device can easily be made by simply hacking already existing devices that do just that. They're microphones that plug into the iPod Standard Connection. So just find one and hack it up. The Audio Plug is for the speaker. Either find a super small speaker that uses an audio jack connection or maybe mod an old phone to suit your needs?
Since its not in 3D, you can't really tell how it all comes together. Basically, its A LOT like this product, except it obviously comes up over the top just like it does at the bottom. Hmmm, maybe I just found an extra albeit costly feature? Extra battery life too? :p
Now just install Skype for the iPhone and Voila! DIY iPhone without the crazy monthly charges! Although call quality will suffer, everything else should work just find. Either way, its doable if you need a phone on the cheap and if you don't rely too heavily on calls or call quality.
So whatchya think? Lame-o idea or pretty neat? I think its rather ingenious personally. jk
Had another thought. I wonder if you could throw in a really small webcam or camera in there? Maybe also from a salvaged phone? It would probably have to be a jailbroken iphone or something though, since I don't think I've ever seen any kind of iPod camera add-on product. Hell, with a microphone, speaker, extended battery and a camera?? One of these would sell for a crap ton! lol