Peter Jackson to Produce "The Hobbit" and a sequel

News I saw on (via Slashdot) has LOTR fans unclenching their hairy, unshod toes and reaching for the tobacco jar:

The two “Hobbit” films – “The Hobbit” and its sequel – are scheduled to be shot simultaneously, with pre-production beginning as soon as possible. Principal photography is tentatively set for a 2009 start, with the intention of “The Hobbit” release slated for 2010 and its sequel the following year, in 2011.