Woot!
http://www.cnn.com/2007/SHOWBIZ/Movies/12/18/film.thehobbit.ap/index.html This has been stalled for years, as Jackson and New Line had a falling-out over royalties from the Lord of the RIngs movies. Looks like they finally managed to put all that aside (probably due to the promise of making more large fistfulls of money).
Interesting that they're planning on making "The Hobbit" as two movies.