I honestly think there's going to be a wipe to just the LEGEND block. Here's my proof/reasoning based off recent news:
-Looking at HGSS, the entire set's Weakness is set at x2. Every Pokemon but the Baby forms has a weakness at this level, and all Resistances in the set are at -20. This makes the cards extremely weak in the format, even with a PL-On rotation. Flat out without help, all of them take dives left and right because of their weakness levels.
-Again from HGSS, the entire set features a much higher energy requirement for attacks overall than the previous sets. You can see a similar trend in Base Set to Neo Generation (It went down), Neo Generation to EX, EX to DP and now PL to GS. This renders the set, again, not as useful in the current format with the SP pokemon and plenty of other fun pokemon sticking around (Flygon, anyone?).
-Last bit from HGSS, the art direction changed. We've got a more traditional japanese style than previous sets, there's more variety in the colors, and the basic tool cards (Pokeball, Full Heal and Switch) are all reprinted in this set. I know this has happened before, but usually this is the marker for the start of a block. (PL has this too, so there's two theories there)
-We've recieved news of the 5th Generation Pokemon being this year. Honestly, If I was PCI and I was wanting to cash in on that, why not force a complete rebuy of every single player in the TCG to catch up to 5th Generation? A wipe to the LEGEND series would satisfy this business need. If you've been to a mainstream place recently, Pokemon cards are kind of stacked up right now, which in my mind indicates a need to re-energize the fan base, again, wiping to GS causes this.
-The format is, for the most part, rather stale. It's hard for any new (meaning Rogue) decks to get going and change the metagame, Arceus didn't do much for energizing the format and HGSS's above problems keep it from being 100% competitive. And let's face it, it's currently hell for new players to get into any kind of competitive shape without Claydol, Uxie, Azelf and in some cases Unown G. You don't need it, but they make things miles easier. Accessibility is a buzz word in the games industry right now, and removing staple cards is a way of leveling the playing field. Yes, this works against the above, however, reprinting similar cards like Ninetails, Noctowl and Ledian GS all force a buy to keep the same competitive edge.
So, I believe that we'll see the first set of 5th Generation Pokemon shortly before or after Worlds and that will be the true mark to say whether or not the HGSS cutoff is going to happen in 2010 or 2011. I really believe they'll take the risk of peeving players to make a bit of quick cash from the new generation of trainers that will come in with 5th Generation.
Granted this is extreme, and I believe the more likely scenario is a PL-On cut, but I have a very sneaking suspicion that there will be a GS cut this year or next.