The Android 1.5 Cupcake update hasn't reached all G1 owners yet but that wont stop the rumor mill from working, no sir!
The latest Android chatter suggests that the next major update will be
Android 2.0 Donut, and will be the version running on all? most? of the new android phones scheduled for released this year.
From what is being circulated, the 2.0 update will be a major update to the platform, and suggests that Android 2.0/Donut will be the first version of the OS that vendors feel ready to appear on their phones (hence why the android phone releases have been somewhat low in number).
We know that the Android 2.0 Donut update will likely add support for WVGA displays, but other than that what features would you like to see?