Publishing mogul Terry MrGraw of McGraw-Hill says Apple’s tablet is based on the iPhone OS, not OS X as many fans are hoping.

In an interview with CNBC, McGraw-Hill’s CEO said his company has been working with Apple for “quite a while” and has prepped 95% of its textbooks for the tablet, which will be a hit in the higher education market.

When asked about by the anchor about the Apple tablet, McGraw said:

“Yeah, Very exciting. Yes, they’ll make their announcement tomorrow on this one. We have worked with Apple for quite a while, and the tablet is going to be based on the iPhone operating system and so it will be transferable… We have a consortium of e-books. And we have 95% of all our materials that are in e-book format. So now with the tablet you’re going to open up the higher education market, the professional market. The tablet is going to be just really terrific.”

Frrm his tone, it sounds like McGraw has seen the tablet — or a prototype. Watch the video above: he sounds very confident about the operating system. As previously reported, the iPhone OS is the logical choice for the tablet.

Via MacRumors.

According to mobile analytics company Flurry, the Apple Tablet isn’t just a very real product, but they’ve detected up to fifty of them floating through Cupertino, running a new version of the iPhone OS numbered 3.2.

The ever vibrating Tablet hype machine has finally attained the emotional timbre of giddy, bladder-evacuating hysteria.

How else to characterize this Techcrunch post, in which Michael Arrington, citing “senior Apple execs and friends,” says that Steve Jobs is saying that the forthcoming Apple Tablet “will be the most important thing I’ve ever done.”

Hearsay? Sure. But Techcrunch’s post has already garnered nearly 200 breathless comments from Giddy Apple fans expecting the Tablet, at the very least, to be a flawless amalgam of iPhone technology with Dr. Durand Durand’s Excessive Machine.

I think we’re officially at the point in the hype cycle that whatever Apple pulls out on stage on Wednesday is going to be a disappointment. The Apple Tablet’s OLED display could function as a Stargate-like dimensional portal to the lanugo-soft inner crevices of Elysium’s ethereal constabulary of virgin angels, and people would still be disappointed that the P.A. Semi chip inside was only sentient, and not — as anticipated — psychokinetic.

“The enemy of my enemy is my friend.” It’s an ancient proverb being revived amid reports Apple is turning to its old foe Microsoft to blunt the growth of Cupertino’s newest rival, Google. Apple is mulling making Microsoft’s Bing the iPhone’s default search engine as it increasingly competes with the Mountain View, Calif. Internet giant.

The BusinessWeek report cites two people “allegedly familiar” with the discussions between Apple and Microsoft. The publication says the Redmond, Wash. software giant “is now a pawn” in the struggle between Apple and Google over handsets, browsers, operating systems and advertising.

Like a modern-day Hatfield and McCoys, Apple and Nokia are at it again, the latest shot fired by the Cupertino, Calif. firm, asking the International Trade Commission to block imports of the cell phone giant. The legal action comes after Nokia asked the same commission to ban imports of iPods, iPhones and Macs.

The action was posted on the ITC Web site without any comment from Apple. Nokia, however, said it will “study the complaint when it is received and continue to defend itself vigorously,” Nokia spokesman Mark Durrant told Bloomberg by text message over the weekend.

We wrap up the week with more deals on iMacs, including $999 for a 22-inch 3.06GHz desktop computer from the Apple Store. Apple is offering four iMacs in all. PC Connection is selling another 21.5-inch 3.06GHz iMac for $1,099. Lastly, if you received a video camera over the holidays, you may be burning to share your masterpieces. A deal on Apple’s Final Cut Express HD could be just the ticket.

We’ll also take a look at storage options, video devices and wireless routers. As always, details on these and many more items can be found on CoM’s “Daily Deals” page after the jump.

Aside from “where’s the tablet?” the most-often heard question in Apple circles is “what’s happening with iPhone 4.0?” Now a developer weighs in, claiming programmers already have a version of the new OS.

“We’ve submitted an updated app for the new iPhone 4.0 software,” according to an e-mail CNET received from what they term a “prominent app developer.” The note seems to contradict yesterday’s report that Apple was delaying releasing OS 4.0 due to concern it could provide clues to its long-awaited tablet device. The tablet is said to share much iPhone technology.

If the forthcoming Apple Tablet does indeed run on the iPhone operating system, which seems likely, it stands to reason that it’ll be a major evolution of the OS, with new multitouch gestures and features that will selectively trickle down to the smaller handsets, even as the app format is expanded to a sort-of “universal binary” system to allow one executable to run on two significantly different hardware conditions.

If that’s all true, then it’s no wonder that Apple is sitting on the release of the next update to the iPhone OS until after the Tablet is officially announced. A source speaking to iPodNN has now confirmed that that is indeed the case: while the iPhone 4.0 firmware is in deep internal testing, it hasn’t been released to developers because there are too many references in current builds to functionality of Apple’s upcoming tablet.

Other than that, iPodNN’s source is tight lipped, but goes on to describe the tablet as an “iPhone on steroids” with multi-touch gestures that are “out of control.” He also claims the internal model number of the Apple tablet is K48AP, running an extremely fast ARM CPU, designed by PA Semi.

Eastman Kodak sued Apple Thursday, claiming the Cupertino, Calif. company infringed patents used to preview images on the iPhone. The lawsuit, before the U.S. International Trade Commission, seeks a stop to the alleged infringement and unspecified damages.

RIM’s BlackBerry is also named in the lawsuit.

Apple has lost more than $450 million from App Store piracy, according to a published report Wednesday. “A conservative estimate of the average piracy rate is that for every paid application developed and sold at the App Store, three more are pirated,” a financial blog claims.

The $7 game Rally Master Pro 3D has a 95 percent piracy rate, according to publishers Fish Labs. The $1.99 game Tap-Fu has a 90 percent piracy rate, says publisher’s Neptune Interactive and Smells Like Donkey. Even developers of applications costing less than $1 suffer piracy. The 99 cent iCombat has a 75 percent piracy rate, publisher Web Scout said.