Drew,
You will never find the perfect time to buy - there will always be something new promised around the corner.

There are several threads here that address your first question - Honda is unlikely to come out with anything new on the 2007. If you live in the states, the rebate is an issue. If you wait too long to buy you could loose the full rebate. There are many threads here that discuss it. But you're definitely safe through Sept, and likely beyond if you stay with the Honda decision.

Can't really answer question 2. Others will, though.

Question 3: Take a look at the post under Hybrid and Related News - Mad market for hybrid... It really depends on what gas prices do. If I were you, I'd figure normal depreciation to be on the safe side (look at how well Civic EXs hold their resale value in the first couple of years, for instance).

There will be other, better, and probably some worse hybrids coming out. Read all about them. There is a lot of info here at GH and lots of speculation too. Again, if you're going to have to sink some significant cash into your Volvo, both the 2006 HCH and Prius are excellent automobiles.

One thing you should also take into consideration b/4 buying is your daily commute (assuming you have one). That could tip your decision toward either the Prius or the HCH, or maybe even convince you to hang onto what you've got. For instance, if you are routinely driving the car on 5 mile or less jaunts, and since you live in a cold climate, you may not see big gains by going hybrid, depending on your current mileage and other factors. Your personal situation is an equation with LOTS of variables.