Reports in the Wall Street Journal and other outlets have software giant Microsoft and U.S. automaker Ford teaming up to produce a wireless in-car phone and data system called Sync. Built on Bluetooth wireless capabilities, Sync will reportedly be offered as an option on two or more Ford models in 2007 (the Focus and Five Hundred sedans seem to be the top bets), and expanded out to other elements of Ford’s vehicle line in 2008.

Sync will reportedly offer increasingly-familiar hands-free mobile phone service via Bluetooth, but also enable users to connect wirelessly to Internet-based information sources, presumably including driver-centric information like traffic reports, weather, news, maps, route-planning, and location information. The Wall Street Journal also reports the service will enable users to access email and music download services.

The firms reportedly plan to announce Sync at both the upcoming CES show in Las Vegas as well as the annual Detroit Auto Show during the second week of January.

Ford also plans to expand the availability of built-in iPod connectivity in its vehicle line during 2007. The company is currently in the midst of painful restructuring and re-organization as its struggles to remain competitive against rivals like Toyota and Honda while maintaining its pension and health benefit promised to employees. The company reported losses of over $7 billion in the first three quarters of 2006.