Based on the newest generation of Audi's modular-length platform, the A4 mechanicals should have a lot in common with the A5, as well. Besides getting the A5 engines and transmissions, the new A4 should also get the more rearward engine position that should help reduce the noseheavy nature of the current model. Not that the current A4 handles poorly, but shifting that engine behind the front axle should make it perform even better. Other than that we shouldn't see many changes.
Still front-wheel drive in base models with Quattro all-wheel drive available, there's also likely to be an RS4 model available some time in '09. It should still feature the 4.2-liter V8, but horsepower is likely to go up to better compete with Mercedes' new C63. Rumor has it we'll be seeing the real deal in September at the Frankfurt Auto Show.