Japanese business news outlet Nikkei Net is reporting that Nintendo will release a successor to the by the end of this calendar year. Highlights of the updated feature set include improved wireless functionality (probably for extra-curricular use--not necessary for gaming), an onboard camera, and music playback.
The report goes on to suggest that the internal camera could be used by certain titles, with pictures taken with it somehow incorporated into gameplay. While there are no specifics on pricing, Nikkei Net says the new handheld should go for less than 20,000 yen (approximately $189).
Like with the DS Lite, the new DS will see a Japanese-only release to start, with a worldwide release soon after. We'll have more information on the new handheld as it develops.