Though the character of Bilbo is much younger in The Hobbit and has thus been recast to be played by Martin Freeman, it seems that we will still be seeing Holm as Bilbo.
Director Peter Jackson has hinted it in his recent video blog from the set, and it came official when people started asking. A few moments ago Jackson answered.
Posting on his official Facebook page Peter Jackson had this to say on the subject of Ian Holm in The Hobbit:
Ian will be returning as the older Bilbo Baggins in The Hobbit.
The good news is that Holm did an amazing Bilbo, but how will he fit in, since The Hobbit is set decades earlier and someone else is playing the character? The only option Jackson has is follow the original Lord of the Rings movies where Ian’s Bilbo was writing a book about his journey. It could be a way, though Jackson hasn’t answer yet.