In an interview with Eurogamer, World of Warcraft producer J. Allen Brack stated that WoW would "probably... need a graphical update from the ground up at some point."
Wrath of the Lich King will include some optional effects for players with high-end PCs, but they are looking to a complete overhaul for the next expansion after Lich King.
Also, next expansion confirmed?
One of the reasons WoW is so successful is that almost any decently equipped computer can run the game. Blizzard's art style makes this work, but it'll be interesting to see if players leave if the game becomes more intensive to run.
Eurogamer: WOW will "probably" get graphical reboot