The next generation M5 is being developed along with the bread and butter — relatively speaking of course — 5-series sedan, which is due out in 2010, according to new reports. The new fast 5 will benefit from the M division's close working relationship with the BMW engineers charged with developing the base car. The fifth-generation M5 is due out in 2011 and should pack at least 550hp thanks to new technology and a bump in displacement.

While the basic V10 engine configuration will remain, sources speaking to Autocar believe the engine's capacity will grow to 5.5 liters, up from 5.0. In the never-ending crusade to lower emissions, the powerplant will also likely feature direct injection and a turbocharger system. All these significant changes sound like they should be worth more than just a 50 horse upgrade, and with competitors from Audi (RS6) and Mercedes (a new E63 is just around the corner, with power estimates just shy of the 600 range) we're betting the power numbers will be much higher. Forced induction would definitely be a first for any M-branded vehicle , and we could just hear the enthusiast uproar if the brand were to dilute its tradition and feel of its driver-oriented performance cars.

Like its predecessor, the newest M5 will sport a six-speed manual or a seven-speed dual clutch automatic BMW call M DCT.

The new sports flagship from the Bavarian manufacturer may also feature some decidedly 'green' technology that traditionally had no place in a sports car of its caliber. The same Efficient Dynamics program BMW has planned for the new 5-series is likely to be used in the M as well. It features a stop-start system that cuts down on idling when stopped, as well as an alternator that also does duty to recapture energy when the car is slowing.

from leftlanenews.com

Supposedly its going to look pretty badass too

Those 550s DO look sweet...

These are a lot better;  I think

You're right
Last picture looks very much like 3-er even the rims
 

The new "8" series looks fabulous.  I hope they actually make it.