I find the thought that Pentax will discontinue 35mm lenses let alone film bodies (this soon) is absolutely crazy.

A) 35mm lenses....

Sooner rather than later all the big brands will have 35mm sensors in most if not all their digital lines. Canon have proved it can be done and any canon user who doesn't have a 1Ds says "I want one" bar perhaps wildlife and sports photographers who benefit from the crop factor. There are a huge range of people out there who want to use a true 12 - 20mm lens on their cameras and get that beautiful wide angle. Why would the companies decide that we're not able to shoot wide angle any more?
Pentax have recently released their 2 macros. After putting out a number of "digital only" lenses, they have turned around and made the new ones completely compatible with 35mm SLRs. This seems to suggest they realise the benefit of doing so rather than "it was cheaper for us to put in the extra stuff to make it compatible with both".

B) As for the film bodies, yes I think it will happen but not just yet. There are a zillion people out there who want to run an SLR but either can't afford to go digital or aren't happy yet with the results from digital.
Pentax are still one of the brands who put out a SLR which has a lot of features at a good price. Look at the other brands and see the comparison. Most will not give you fully manual let alone things like DOF preview etc.
Another point is that I believe Pentax have quite a few followers in the Avian photography area. The *istD is incredibly slow and noisy when put against the FPS rate of their film bodies. Until they can guarantee and 8 - 10 Mp camera with quiet mechanics, quick and accurate AF and 5FPS shooting with a large buffer (the Canon 20D has a buffer of 50 odd images if used with the right CF card), they'd be silly to discontinue film bodies.

As for me, I shoot with the *istD, MZ-5n and P30. The ability to shoot with all my lenses on the *istD and MZ-5n is fantastic. I use my FA-D18-35 on the MZ5n almost all the time now and get the "450mm" by using the 300 on my *istD. Best of all, I've been buying lenses all over ebay and I don't care if they're M, A or AF versions. No other company can do that for me.
Whack a M series prime lens on an *istD and the results beat my bosses 20D with L series lenses.

Good on ya Pentax!

I'm new so I'm not sure how mant Aussie users there are here. What's the chance of getting a few Aussies together (as the pentax scene isn't too big here). It would be very helpful for all of us I think.

Same thing here. I have the MZ-5n and bought the *istD. I was given a bonus from my boss with which I bought the FA J 18 - 35. The camera shop told me that there was no way I'd be able to use it on my film cameras and I'd have to buy a pro range ultra wide angle. I went home and promptly shot a roll of velvia on my film body. I carry both bodies for that reason.