Ian McKellen Definitely in; Ian Holm Yet Unconfirmed - Variety confirms McKellen, though Holm's status as already cast seems questionable.

Variety has posted an article which further confirms Ian McKellen as Gandalf, but casts some doubt on whether Ian Holm is yet confirmed as Bilbo. They say "Ian Holm is in talks for the role of Bilbo," but nowhere mention that he has accepted the role yet.
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Check out the whole article here; it's got some additional info worthy of your perusal as well...

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