On stage with Walt Mossberg, Google Engineering VP mentioned that an enterprise version of the Nexus One could have a physical keyboard and longer battery life—and there could be more Google devices, including a budget model.
The original question was about the the broader program of "Google" phones, as opposed to "With Google" phones, and generalized crap with Android. The Nexus One is the first in a series, or "program" as Rubin calls it, which could include new devices. Unprompted, though, he brought up the possibility of a new enterprise phone that's like the Nexus One, but with a physical keyboard and larger battery; he quickly backed off, but not before Mossberg asked about the possibility of a smaller phone, to which Rubin granted a half-nod. And then they dropped it. Come on, Goatberg!
Anyway: release date, specs, price, concrete existence are all still unknown or uncertain, but the Nexus One doesn't sound like it'll be alone in the Google Store for long.