The Hobbit is a prequel (and a great book in its own right) to the storyline following the ring bearer to Mordor and the saving of all Middle Earth. The Hobbit follows Bilbo Baggins on a great adventure that eventually leads him, unknowingly, to the ring of power.
There have been rumors that this film had been delayed, but it seems that the two-part film is still on track for a December 2011 and December 2012 release, according to Peter Jackson who said that the script should be completed shortly after Christmas (2009).
The Hobbit is set to start shooting in New Zealand June 2010, but MGM is in a financial fiasco. New Line/Warner Bros. is helping MGM figure out their financial woes, but there is still a lot of work to be done to get the studio back on its feet.
Other than Iam McKellen returning as Gandalf, the rest of the crew is still unconfirmed and will make it mightily difficult to start shooting without any of the cast. Hugo Weaving (Elrond), Cate Blanchette (Galadriel), and Andy Serkis (Gollum), who all appear in The Hobbit are not confirmed on the cast. Guillermo del Toro will be at the helm, directing.