Although the destination of The Hobbit's production has not yet been resolved, (short version: a New Zealand actor's union was trying to strong-arm Peter Jackson into using union negotiation for wages of non-union actors, in violation of New Zealand law) Peter Jackson and Wingnutt Films have issued the first official casting news:
http://www.theonering.net/torwp/2010/10/21/39468-meet-your-hobbit-cast/Martin Freeman (The Office) will be playing Bilbo Baggins. I'd have much preferred to see Ian Holm return in the role, both for continuity AND because of the simple fact that Bilbo in Lord of the Rings is supposed to look EXACTLY as he did in The Hobbit due to the effects of the Ring, and Bilbo was FIFTY when he claimed it. However I'm sure the 10 years that have passed between the production of the two films and the increased physical demands of the role would be too much for Holm (who will be 80 by the time filming starts next year). Freeman does look a good bit like a younger Holm, so with the right makeup I can see this working.
I am skeptical about their rumors of Bill Nighy as Smaug. He just doesn't seem to have the right voice.
Although this article says Aiden Turner (Fili) and Rob Kazinsky (Kili) "round out" the Dwarves, the article fails to mention there's still five Dwarves missing from the cast reports: Bifur, Bofur, Ori, Nori and Balin. I'm hoping this doesn't mean that Jackson hasn't decided to reduce the number, particularly since Balin's presence is rather important (he was Bilbo's closest friend of all the Dwarves, and obviously plays a minor role in the background of Fellowship of the Ring).
Not mentioned in this article, but pretty much confirmed, is Ian McKellan returning as Gandalf, with Andy Serkis reprising his digital role as Gollum. Additionally, there is speculation that Hugo Weaving intends to return as Elrond, and rumblings of an Orlando Bloom cameo (I can see this working VERY well, as Legolas is the son of Thranduil, the Elf King in the Hobbit, so would likely have been present in the court. Just give him a couple lines that would have otherwise gone to some nameless Elf extra).
There's been some suggestions that The Hobbit will be expanded somewhat to include events with the White Council that are implied but never actually shown in the book. Lending some support for this is the speculated casting of Sylvester McCoy as Radagast the Brown--a member of the White Council--as well as rumors that Cate Blanchette will make a return as Galadriel. Neither character appeared in the book (although I DO think Gandalf references Radagast as his "cousin," it's been a while) however both were present when the Council drove Sauron out of Dol Guldur in Mirkwood during the events of the Hobbit.
