Hmm... the GNU Radio looks very, very promising!

I think they could do it with software now, but a small device like this would have to have a dedicated processor for doing the decoding/encoding, which means it would need a better (more expensive) battery to have two processors running simultaneously (and sharing data continuously). But, I think if Nokia has the marbles... They could certainly try this if they wanna go big with the battery life: http://www.livescience.com/technolog...w_battery.html

Maybe Nokia will be the first company to try it out (I wouldn't mind paying the bigger price for something nuclear powered)