Boy Genius Report is saying that the new multi-touch gestures in iOS 4.3 beta and a tip they have received, confirms that the next generation iPad will not have a physical home button. I would call BS on this if it was anyone other than BGR reporting it.

That said, I played with iOS 4.3 last night and the multi-touch stuff for switching apps and getting back to the home screen is awesome, but it means one thing: two handed operation. You simply cannot pinch with all 5 fingers to get back the home screen unless you are resting the iPad on something or holding it with your other hand.