Yup, rentals are ceasing. You can still buy them outright. Though I've heard that some places are selling them discounted. (Apparently a Miami Disney Store not only had them, but is now selling them at $27.) Most Disney Stores didn't have them for sale by the way.
Not to fear. They're not going away. In fact, they've been such a success that 2.0 is coming out. So many people bought them rather then rent them - something Disney never expected - that they're shifting gears for the 2.0 release next year.
Already it's rumored that 2.0 will be more interactive as well as offer a lanyard way to carry him. He's also supposed to have a whole new wardrobe and might even be joined by Pal Pooh or such. (Other characters have been on the rumor-mill for a year.)
1.0 will still work. Though you'll need 2.0 to get the newer interactivity. No idea on price for the new one and no idea if he'll be the same size as the current one.
Currently, they cost $60, work in all four parks and he will say things at home (though it's random jokes as opposed to the location-sensitive topics he also says in the park) as well as play three games.
I've owned one since April and have taken him a dozen times to the parks. It's a lot of fun. I'm interested to see what improvements they make for 2.0 though I'm a little miffed about having to buy a second one to get the better technology. But hey, that's how all technology is. Always behind the the latest and greatest!
-m
