At this point, there's been no official confirmation of Thorton's existence from AMD. However, The Inquirer points out that the latest BIOS for Epox's 8RDA+ explicitly adds support for the Thorton core. That doesn't tell us much about what Thorton actually is, but it does give the rumors a little more credibility.
As AMD prepares to launch its Athlon 64, it only makes sense to streamline the Athlon XP line a little. I presume that Thorton would see action at the budget end of the processor spectrum where it should be a faster and perhaps even cheaper alternative to Intel's Celerons. For now, though, there's no official word on how, when, or even if Thorton will materialize.