It's a balancing act, reviewing the many rumors floating around and determining if they're worth reporting or dismissing. The latest rumors suggests competing iWatch sizes (anywhere from 1.3-inch to 1.6-inch to 1.8-inch) and designs will be shipped this fall. My impression is that it's more likely Apple is testing a variety of designs to see what makes sense, or different generations of the product are being tested.
For Apple to go from zero smartwatches to two or three designs at release is unlikely. This is a new category for them (and relatively new for the industry) and Apple will likely want to test the waters. Apple didn't release the iPad and iPhone at the same time (although the iPad concept actually preceded the iPhone.) Only recently did Apple release two variations of the iPhone 5 (the iPhone 5s and the less successful iPhone 5c) at the same time, and that was probably a mistake.
There may indeed be two sizes of iWatches being built and tested, but it's more likely that one will ship first, and the larger one might ship when supplies of Sapphire are more plentiful. Apple will want to be able to say that the iWatch was the most popular smartwatch shipped and splitting the sales among two variations hurts that message.
This is one scenario where I'd love to be proven wrong, and have more choices. However, Apple is more likely to feel that they've designed the "right" smartwatch and two different versions would be inconsistent with that.