Midna

Midna is a character that has been confirmed to exist in the newest Zelda game, The Legend of Zelda: Twilight Princess, which is expected to be released October or November 2006. Midna is a resident of the Twilight Realm, a dark presence that has spread all across Hyrule. When Link enters the twilight, he transforms into a wolf and is afterwards captured. In his prison cell he meets Midna, a strange, dark creature with an agenda of her own. Midna rescues Link, and can be seen later riding him in his wolf form while in the twilight.

While Midna did rescue Link, that doesn't mean that she is on your side. It has been said that Midna is not interested in helping Hyrule, but her plans go against the twilight and its residents, so she teams up with Link. We aren't exactly sure how she helps Link in his adventure at this point, but it appears that she can use her powers to help Link target more than one enemy at once and to see things that are hidden. In the E3 2006 demo, it was revealed that Midna takes the form of Link's shadow while not in the Twilight Realm.

Theories
There are many rumors going around about whom Midna is.

Majora Theory
Some think Midna may be Majora. Let's look at the evidence:
 * 1) Aonuma may bring some of his old characters back
 * 2) Majora's voice is a bit girly, when it turn into Majora's Wrath, the eyes of the mask look like breasts
 * 3) Look at the eye of Midna's helmet, then the eye of Majora's Mask. They are very similar.

Other Theories
Some think Midna may be Navi. Unfortunately, there is no evidence, but hopefully Midna is not Zelda. How predictable that would be! Whether Midna is a mask, fairy, princess, essence of the Triforce, or something else; at least it's in the masterful hands of Nintendo.