Okay, chalk up yet another one in the next-gen iPod rumor column, because we’ve got yet another Internet rumbling for you to chew on. Seems that the world’s largest hard drive maker, Seagate, could be working on a deal with Steve Jobs and his associates to shove a high-capacity 1.8-inch hard drive into the forthcoming “true” iPod Video.

While it seems that everyone else in the market is doing backflips over the power- and space-saving advantages of NAND flash memory, Seagate insists that there is still a huge market for them and their traditional spinning discs of storage. After all, they’re substantially cheaper for a comparative level of data stashing.

By several indications, Seagate could be providing Apple with 60GB and 120GB hard drives for the iPod, bumping up the capacity from the current offering of Video iPods. Of course, Apple neither confirms nor denies these rumors.