Google is now having users test out their phone, and some of them shared that they have one(even though we would imagine they were told to keep it under wraps.
The phone is going to be called the Nexus One and it will be manufactured by HTC, and will have the Android OS on it.
News of this phone spread rapidly through twitter and many blogs are collecting as much info on the phone as possible.
“Google Phone = iPhone + a little extra screen and a scroll wheel. Great touch screen, and Android.” - Cory O'Brien
The Model the phone uses is pretty much the same as the HTC Passion.
"Eating our own dogfood" meaning they are giving their staff the phone to test out, if it's good enough for Googlers it's good enough for the general public.
The phone is estimated to be released in January.
I have a live feed of twitter posts about the Google phone in this post so you can find more information on it as it's released.