is The Hobbit in the works?

I've read all over the internet today that, according to Variety magazine, MGM's CEO Harry Sloan announced some of the big projects his studio will be taking on in the near future. Included were sequels to The Pink Panther and The Thomas Crown Affair, a new installment of the Terminator series, and most surprisingly: J.R.R. Tolkien's The Hobbit (MGM owns the distribution rights to a Hobbit film). And he wants Peter Jackson to direct.
I had given up hope on the prospects of seeing The Hobbit in theaters, and at this point I am still very skeptical. However, regardless of my outer pessimism, the geek within is very, very excited. How does Peter Jackson actually fit into this equation? Well he's quoted over at Aint it Cool News saying that he hasn't been approached yet but he would love to do The Hobbit, however he says his schedule for the next couple of years is filling up (Though I have a feeling that if they asked him to do it, he'd find the time). No word from New Line (who owns the rights to make The Hobbit) on whether they see eye to eye with MGM.
It really wouldn't be the same if they didn't bring back the entire Oscar winning crew from the Lord of the Rings trilogy. So of course there's already an online petition you can sign that is addressed to MGM and New Line, pleading for the same level of quality that we got with the LOTR trilogy. I've already signed it; I would love to be able to watch The Hobbit, follow it with the LOTR trilogy and not be able to tell they were made as separate projects. Alas, it's still very early to determine if this project will even happen; I won't be convinced until they actually start filming.

Here are a few simple demands I ask of MGM and New Line:
1. They must get Ian McKellen to return as Gandalf the Grey.
2. Peter Jackson and Weta have to be behind the production.
3. The Oscar winning writing team of Jackson, Philppa Boyens and Fran Walsh should write the script, or the cohesiveness will be off.
4. Ian Holm as Bilbo Baggins, no he's not too old.
5. Hugo Weaving in a quick appearance as Elrond would be nice.
6. They have to find a great voice actor for Smaug the dragon and it can't be Sean Connery or James Earl Jones. I suggest Brian Cox, he's great and he's Scottish.

That is all I ask (That, and please don't call it Bilbo Begins).