Thanks to Methed Man for finding this story...this sounds so hawt!! And also to...Thanks to http://www.sonicstadium.org/sonicnews/438/
Sonic Unleashed
Don't know whether to laugh or cry.
Sonic Team has a funny way of making games these days. This morning The
Sonic Stadium broke news of a forum post leaking images pertaining to
be from Sonic Unleashed. We can now confirm that these images are real.
This will be the next Sonic game.
And yet, we don't know quite how to take the news. On the one hand,
we're excited with the promise of gorgeous levels and a Sonic that we
actually want to associate ourselves with. On the other hand... well,
read on.
Sonic Unleashed will be the next Sonic 'canon' game, if you will,
intending to follow on from Sonic 06's Iblis disaster (in more ways
than one), hence the weird unimaginitive dark creature git in the
screenshots this morning. You see Super Sonic attempting to stop Eggman
once more, but a new trick up his sleeve results in Sonic having to
deal with a rather unnatural curse.
A werewolf. Sonic has to fight a werewolf alter-ego of himself.
Yeah.
But hey! Look how gorgeous this is!

Makes it all better in a weird way, right? The locales look stunning,
and Sonic has never looked better. During the Sonic stages you can
expect to encounter levels in a mixture of tried and tested ways,
including Sonic and the Secret Rings style running and switching to
2.5D platforming on the odd occasion.
At various points he will change into his werewolf form, at which point
a gameplay gimmick will come into play - something we've been told
isn't exactly in keeping with trying to make a Sonic game... well...
let us say, 'good'. We have our suspicions.
The blue hog won't be alone on his adventure either, as another new
character that will probably be dispensed of in ten minutes will make a
no-doubt unwelcome and unnecessary appearance. Just who or what this
character will be is unknown as of yet.
Finally, Sonic Unleashed is currently a working title and, like Sonic
Wildfire before it, will likely change before its release. We weren't
told what consoles the game is destined for, but if we were to put our
speculating caps on we'd say the SatSR elements would point to the Wii
being a likely candidate. Sonic Team appear to want to continue the
trend of adapting old stories into the Sonic universe, let's hope the
werewolf thing doesn't bring things down a peg or three.
To see some official art of the were-hog, check out SEGA-Portal's archive of screenshots that were added throughout the day.