Well, the latest news stories suggest that Nintendo isn't working on a redesign, but in fact is working on the next system: http://news.cnet.com/8301-10797_3-57452328-235/miyamoto-were-on-to-the-3ds-successor/
But if you look back to the first rumors of a redesign way back when: http://www.engadget.com/2011/08/23/rumor-nintendo-working-on-3ds-redesign-10-joystick-add-on/
They said back then that there would likely be a name change and that the 3D would be downplayed. Well, this would be exactly the same thing as a "next system". So I think these are one and the same rumor, and it all makes sense. The redesign is the new system. I would say that the new system would probably be able to play DS and 3DS games as well as cartridges that are expanded for the new system. I would suspect that the functionality of the system would be expanded with more apps etc.
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