There was an earlier thread on this topic:
Kindle 2.0.
I agree that a software update is most likely, particularly since the current software version is 1.0.4.
However, in the longer term I expect to see Kindle's with a larger (8" or 9.7") screen and (perhaps) the
Epson controller. This would be an expansion of the line up, rather than a direct replacement for the 6" screen device.