TheOneRing.Net says they have confirmation now that Elijah Wood will be reprising his role of Frodo Baggins in the upcoming Hobbit movies. Despite the fact that Frodo wasn't alive during the time of that story, the website also says they know how the character will be integrated.
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I think thats pretty good. It puts a good twist on the story, but it also keeps true to what LOTR did better than pretty much every other franchise. Which is continue the story where the last one left off, but still offer a fully complete film. So you can still watch all the films, including the hobbit, and get that effect.