Taken from AppleInsider

Patents may lead to click wheel iPhones
Accompanying its multi-touch mouse filing, a second Apple patent filing revealed Thursday includes a claim for a "Telephone Interface for a Portable Communication Device" that would bring phone features to an iPod-style click wheel. Hearkening back to rotary phones, the invention would let a user pick numbers to dial by rotating the click wheel to select numbers from an on-screen circular list.
A second patent, "Touch pad with symbols based on mode," would change the controls of the click wheel itself so that users could tap parts of the wheel itself to compose individual numbers.