A rumor has surfaced from CNN who cites a major Apple investor as the source. The investor, in turn, cites the fact that he has heard this from "multiple sources." The rumor states that Apple will mail invitations to a press event, at which the new iPad mini will debut, on October 10.
Following Apple's traditional time frame, this would yield an event on Wednesday, October 17, with the product likely going on sale Friday, November 2. This would put the product on shelves in time for the critical holiday season, and could steal quite a bit of thunder from the upcoming Microsoft Windows 8 tablets, both the Wintel version and RT version.
The iPad mini is rumored to be a 7.85-inch device and cost less than its big brother, the iPad. It would slot in between the iPhone/iPod touch and the normal-sized iPad. Pricing would likely slot into that same range, making Apple a bit more competitive with the $199 Android tablets that have been so popular.
As always, throw some salt over your shoulder as this is just a rumor. Nothing has been confirmed, and likely won't be, until the event invitations get mailed.