Well, the latest word I've heard from several usually reliable sources is that yes, the Legacy wagon will be discontinued in the US for 2008. This means if you want a Legacy wagon—and not an Outback wagon, better act fairly soon, as the new models will go on sale around July.
Fueling more (take-to-the-bank) rumors is that the all-new '08 WRX and the facelifted 3.6L Tribeca will be the big news at NY. Finally, the all-new WRX-STI will debut at Frankfurt in September. The WRX should go on sale in August and the STI probably next January. The Tribeca should go on sale in June.

Hey Bob! :) Good to see ya. I have to agree with the last 2 Subaru press events being a little "bland"... There have been A LOT of disappointed people in NASIOC, etc... On the other hand, with the debuts of the new Impreza pending, I think they should have a bit to look forward to... Granted Subaru doesn't let us down with the styling aspect... Mechanicals have rarely, if ever, failed.
 
In terms of speculation: (yes, I know, here we go again) From a source that I have that used to work for Subaru, they state that at the time they left, the WRX only had a hatch form and that they were scrambling to make a sedan variant now... Obviously they've been removed from the scene for almost a year now and many things can change. But here's what I know from them (look at all these rumors!):
- Impreza looks like an A3 in profile. Front end looks like a snub-nosed Jetta.
- Tribeca to be better looking... but a bit on the bland side... Not "over-styled" like the current one.

I don't know, looks kinda like the current G coupe IMHO. All of these new sports cars seem to be using the same lines these days...

If the Infiniti Coupe concept from last year is any indication - Infiniti is going to be pretty conservative with this redesign, but hey - why mess with a good thing?? (just ask Porsche how that goes)

At least Subie kept the Outback wagon. Otherwise your choices for a midsized wagon under $25k would be limited to the Mazda6 and... uh...

Subaru would never drop the Outback wagon. That's their cash cow.
I think they're just getting more focused with their marketing.
Legacy = sedans
Outbacks = wagons
I think (suspect) that having both Legacy and Outback wagons, which are very similar, was confusing to customers not that aware of the brand. This makes it easier for both customers and sales people.Also, the plain fact is that the Legacy wagon and Outback sedan (also being dropped) were both very slow sellers. Why keep such low volume models in the lineup? An argument can be made for keeping a relatively low volume car as an STI, as it is a "halo" car for the brand. It may not sell in huge volumes, but it bring customers into the showrooms. They come in to see an STI and end up buying a Legacy GT, or some other Subie.

It's always been a bit confusing - to find my '97, you have to drill down to Legacy and then to the Outback. I'd rather drive a Subaru Outback than a Subaru Legacy Outback (at least I have a "Limited" version - if it were a base model, people would compress it to SLOB).

I think the US must be the only market where Legacy sedans outsell the wagon. In Canada and from what I remember in Europe, the wagon is far more common.
 
I imagine the US is the only place they will drop the wagon.
 
The Outback wagon is cool but it's really overpriced for what is really a trim package. I don't think I have ever seen an Outback sedan.

The Outback's rather more than a "trim package" on the Legacy. It has different wheels & tyres, higher ride height (9" on the latest ones, making it a truck in the eyes of the EPA), different gearing IIRC and quite a lot of unique body and trim.
 
The original Outback ('96-'99) was pretty much trim, hence the "Legacy Outback" designation, but the 2000-04 Outback became its own line and model listing--and current models have diverged even more. I'm always surprised by how different my coworker's Legacy is to my Outback.
 
All those Legacy wagons sold elsewhere are just replaced by Outbacks here. I think I read somewhere once that if you combine the Legacy and the Outback variants, Subaru sells more wagons than any other maker in the U.S. including Volvo.
 
I do wish they'd make a Legacy GT wagon, though ... the one I never understand was the Outback sedan.
 
In a way, the Outback just takes 'em back to their first triumph in the early '80s when they put white spoker wheels on the AWD versions of the old pushrod cars ('80-'84) and jacked up the suspension. Those cars sold like hotcakes, cemented their reputation as makers of tough AWD cars ... and then they dropped that theme and didn't revive it again til '96.

umm... They do make a GT wagon. Only bummer is that starting in 06 you had to get the auto and leather and every other option for the Legacy GT wagon. I just bought an 06 Special Edition Wagon and it is an awesome car. I would have done the GT but the 6500 price difference blew it out of the water and I didn't want an auto. Mine is perfect because I didn't have to the get the leather and a bunch of other junk to get a sunroof and it looks just like a GT but is just missing the hood scoop! The turbo would be nice but this car is plenty quick (I traded a dog 04 Nissan Crew Cab 4x4 non-s/c for it) and the gas mileage makes up for it. I have to say it doesn't suprise me that the wagon will be going away. I don't see many wagons like mine, instead they are all outbacks. And I live where Subaru's are everywhere (near lake tahoe). To me I wanted a more aggressive look and just about every outback driver I know is over 60 years old! and now for 07 you can't get any subie wagon with a manual which stinks. But I do love the wagon though. It's a shame more americans can get over their egos. Everybody makes fun of my wagon but it fits a ton of stuff in there, and if I actually need AWD with ground clearance or more room to haul something I have an 89 Chevy 1 ton 4x4 that gets the job done!

I recently test-drove the 2007 G35 sedan, as my dealer tells me the coupe will have much of the interior setup. I was so impressed with the new toys and gadgets that I just booked my flight to the New York Auto Show to checkout the 2008 coupe. The details are on my blog: http://www.autoverdict.com. The only questions is which day of the autoshow will the coupe premier on... does anyone know?