No regenerative braking? It would hardly be considered a hybrid at all! Great pains were taken to increase the efficiency of regenerative braking on the new Civic, so this would surprise me big time.
As for the Insight engine, it just won another award for engines under 1,000 cc. Sure a larger engine would give the Fit more pep, it would also add cost and weight and decrease fuel mileage. With a stripped down half price version of the civic engine I doubt it would even do as well as the Civic.
How much would the 2432 lb. Fit weight with the automatic tranny (required for cylinder idling), and hybrid battery module of the Civic? Now if Honda has designed an all new hybrid engine for the Fit, great, but I heard that they were only going to sell it in California. I can't confirm that, but it seems like a lot of trouble to design an entirely new engine for one State,
unless of course they are going to use the new engine in the Insight as well. We can always hope!
One thing we know from the past is that Honda usually zigs when everyone expects a zag. They are not going to accidentally let something slip unless they want to start people talking. I think all the "leaks" that we are getting about the new Prius is to get people enthused ahead of time, possibly because they are worried that Honda has some radical new improvement that is going to upstage them. In any case Toyota is putting about 10 billion dollars into the new Prius. They will have to move a lot of Prii to pay that off. I suspect they believe the future belongs to hybrids. Honda by definition will do the same, likely with a smaller budget. Don't be fooled into thinking they've turned out the lights and gone home.
"May you live in interesting times", (old Chinese curse).