A report in Japan's Nikkei financial newspaper (reposted via NeoGaf) reveals that Nintendo plans to release a new iteration of the DSi with a whopping 4" in screen real-estate. That would make the new model's screen three-quarters of an inch larger than the current model. The story puts the release date for the updated DSi as later this year, with the price to remain at the same 18900 Yen as the one currently on store shelves. Whether it will see release outside of Japan remains under consideration.
The story attributes Nintendo's impetus to increase the screen size on substantial feedback from users. It also notes that the larger screen is meant to cater to older users who have expressed difficulty when gaming on the smaller screens.
There are probably more than a few folks besides older Japanese gamers who would think that in this case, bigger is better.