The rumors seems to be getting stronger courtesy of Joystiq.
Joystiq has learned that the previously rumored remake of Halo: Combat Evolved will indeed launch this holiday season for Xbox 360 with a full visual overhaul. Sources explain that the re-release is not Bungie's 2001 Xbox game simply running at a higher resolution -- it's being remade with new art assets. While Halo's audio will likely remain unaltered, the controls will allow for more recent Halo configurations.
The Halo: Combat Evolved remake is allegedly being developed by New Jersey-based Saber Interactive, the company behind TimeShift and Namco's upcoming Inversion, but we've been unable to confirm the nature of the engine powering it. We understand that it's something other than the Reach engine.