auto express confirm's that there will be a hybrid by 2010 using a new system that will be found in the new generation prius,there was no mention of engine size.

Old but..

Upcoming Lexus IS hybrid to feature a 2.0L I-4 engine?

To make the IS saloon fit Lexus’s strategic vision, a hybrid version of that car would likely have a four-cylinder petrol engine to give the performance of a V6 with the economy of a four-cylinder.

“But the question is how we develop a four-cylinder hybrid,” says Lexus.

The Toyota Prius uses a four-cylinder engine, but of only 1.5-litre capacity and transversely-mounted.

An IS hybrid would need an engine of around two litres capacity and the electrical hardware and batteries be packaged around an in-line engine and rear-drive gearbox and axle. Read Article

From: http://www.autospies.com/news/Upcoming-Lex...4-engine-14819/

If they do actually make an IS hybrid (which seems unlikely due to the space issue) I can't see them making one with a 2ltr engine, Lexus markets them as performance hybrids so wouldn't make any sense if it would most likely have exactly the same performance as the IS250.

It is much more likely that they'll use a lot of the same mechanicals from the camry hybrid (2.4 ltr) but give it more performance than it has in the camry

Wasn't it reported on here that Lexus intend to make a full Hybrid line up by 2012?

Anyhoo, just like the computer, Hybrid technology is shrinking and as there is the Camry Hybrid available, only a matter of time before (and I am only guessing) that it can be implemented into similarly sized models across the range. So an IS hybrid is not such a tall fantasy.

Question is how quickly can Hybrid technology be perfected so that it proves truly better than the equivalent petrol/diesel engines out there?

every Lexus will have a hybrid version.

There will be no more diesels.

As technology improves boot space will increase....They will not announce it you'll just notice the increased boot space.