As predicted, Apple's next big event will be on the 23rd of October:
What we're almost certainly going to see is a fully-built version of this:
That is, a 7.8-inch iPad. Here's a very good mockup of what it could look like:
There's also a pretty strong rumor saying we'll get updated iMacs — but don't expect Apple to make a very big deal out of this:
What we should expect, based on early rumors, is a 7.8-inch device that's less powerful, more affordable and otherwise largely similar to the current iPad.
The size is less about usability than price — Apple could have made a 7-inch tablet from the start, but chose to go with 9.7 inches instead. The smaller size will let Apple hit impulse-buy price levels, competing with the Kindle Fire and Nexus 7.
The iPad has been hugely popular at the $500 price point; something like a, say, $250 price tag would make the iPad appealing to a whole new type of buyer — the person who likes, but doesn't really care, about tech.