Judging by that 3D Lugia animation, I suspect that 5th Gen will be made in true 3D. That would be the best thing to ever happen to Pokemon.
I know it's not real evidence, but they're stepping further and further to that realm. First, they simulate 3D with 4th Gen graphics, then fully include it? Sounds pretty solid to me. Plus, Pokemon needs a true overhaul, and that would certainly do it justice. The DS is capable of N64+ graphics, and Pokemon Stadium has proved that Pokemon can be rendered fine in 3D, so I'm positive that 5th Gen would look superb in the format.