Tech blog Gizmodo has acknowledged paying for the acquisition of prototype next-generation iPhone that was allegedly “found in a bar” in Redwood City (oohhh, what was the Apple employee drinking?). Gizmodo then took lots of photos, disassembled it, and published detailed reports.

Nick Denton, publisher of Gizmodo, acknowledged that he paid for the device and says he's a proud practitioner of “checkbook journalism.”

How pathetic. This has got to be the beginning of the end of the techno-blogosphere. Has Gizmodo gone TMZ on us?

The Guardian points out that technically, this is quite possibly illegal. Did cheeky Nick check with his lawyer's before proudly tweeting it around town?

But even a better question: Is it real? To show you how far Apple geeks will go, Daring Fireball blog author John Gruber has gone to extreme analytical lengths to prove this may be a real Apple prototype. The clue in his hunch is the presence of a glass-like ceramic enclosure: “Apple patent application, for high-durability ceramic enclosures. Glass-like appearance and feel but far stronger and more scratch resistant. And: radio transparent.”

Not everybody is buying it. One contributor to the Gizmodo message board says it's a “controlled fake”:

I'm with thousands others who believe this is a controlled fake. And for all I've seen so far, Giz could be in it. Some things just don't add up, like how Giz wasn't able to figure out the screen resolution and CPU.

Giz, if you managed to display anything on this (and you said you did get the “Connect to iTunes” screen) you can photograph it next to a ruler, zoom in and count the pixels per cm and extrapolate to the screen size. It will give you “only” an estimate, but it's better than nothing.

And you managed to crack it open and yet no pics of the CPU? Puh-lease! How high on crack do you think we are?

We like conspiracy theories. We'll see if Apple retaliates. What if both Apple and Gizmodo were both in on the action? This could be an elaborate hoax. Nick Denton is an innovator -- maybe this is some kind of new, avant-garde advertising business model.

It just goes to tell you, you can't really tell what's what anymore on the Internet. It's a hall of mirrors.