From the large amount of rumors that have come out in the recent months, there will likely be an iPad Mini. From this you can conclude that Apple is trying to create competition with the other 7-inch tablets in the market.
The iPad Mini will most likely have a 7-ish inch screen, but most likely it will not be a Retina display since they will need to keep the price down to be able to complete. Apple might put a higher res screen than the iPad 2 in it but not a high as the The New iPad. It should also have a A5 chip just like the iPad 2 and run the latest version of iOS 6. The iPad should include around 512 Mb of ram and the new lighting bolt connector like on the iPhone 5. There probably will not be a data plan version of the iPad Mini to reduce the overall cost of the product line. The form factor most likely will ether be similar to the iPad 1 or the iPhone depending on what rumors you look at.
Overall the iPad Mini, or whatever Apple is going to call it, should be around $200 to $300 depending on a couple of factors: if it has a high res screen, 3G or 4G antennas, and the processor.