According to a Prius Chat newsletter, the "Next Generation Prius will be unveiled at the 2009 Detroit Auto Show in January. The rumor around Toyota dealerships is that the Gen III Prius will be on sale in April 2009."
Edmunds Auto Observer speculates on updates which include 50 more horsepower and improved gas mileage. They suggest plug-in and Li-Ion options won't be available until Gen 3.1 in 2010.