Peter Jackson will be making a movie version of The Hobbit:

The Oscar-winning Wellington film-maker and Hollywood studios New Line Cinema and Metro-Goldwyn-Mayer Studios announced today that they had resolved their legal dispute. Jackson and partner Fran Walsh will serve as executive producers on two Hobbit movies.

Pre-production will begin as soon as possible and both will be shot simultaneously, tentatively in 2009. The Hobbit is likely to be released in 2010 and the sequel in 2011.

(Via Instapundit.)