The announcement this morning of Nintendo's 3DS - a 3D handheld - also came with the news that the new unit will be backwardly compatible with current DSs but will replace them.
The official word is that, ""Launch of New Portable Game Machine
"'Nintendo 3DS (temp) is going to be the new portable game machine to succeed 'Nintendo DS series... and will include backward compatibility so that the software for Nintendo DS series, including the ones for Nintendo DSi, can also be enjoyed."
An E3 announcement in June is confirmed.