Jackson said months ago in an article I read (I'll have to go back to find it, I think it was in an interview with IGN) saying that the story of "The Hobbit" wouldn't be able to fit within a two or so hour film, and do the original source material justice. This leads to him saying it would be a pair of films for the hobbit, not one single film.
Personally, I think that would be the best move. The story can be complex in spots, and I could see where the story could be split into two films. So, in my opinion, it's either that, or we're looking at one of the other Stories from Middle Earth.