My personal guess would be that Porsche keeps the flat six engine for the new 911 generation (due for MY 2005???) but also offers a V8 engine on the new 911. Why not?
To Ron: I don't think that the current 911 model will make it into the year 2010.

Regarding a power upgrade on the Turbo: what Dürheimer said actually gives more credibility to an old rumor who said that Dr. Wiedeking wanted to have 500 HP on the 996 Turbo from the start but marketing department was against it. No doubt, the 996 Turbo IS in fact good for 500 HP. I personally know so many tuned 996 Turbos and none of them had serious problems, not even after driving almost 70000 km (!) pretty hard.
My speculation (PLEASE ... this is PURE speculation!) would be: 996 Turbo gets 450 HP starting with latest MY 2004. At the same time a powerkit with 500 HP will be offered OR a 996 Turbo S with 500 HP. Again, this is pure speculation.