From what has been gathered from other sites the LS will be redesigned in 2008. It may be on the Mazda 6 platform only modified or stretched. Also, it may get new badging but that's not confirmed. The Zephyr is not replacing the LS. It's a smaller vehicle than the LS and is a compliment to the Ford Five Hundred. The Zephyr will only be available as a FWD for the first year but end up offering an AWD at a later date. I would suspect that Lincoln will need to keep a sport luxury sedan in the mix to be competitive with BMW and Cadillac. Cadillac has silenced Lincoln in this category since the unveiling of the CTS-V. Also, Chrysler has spanked Lincoln too with the 300C.
I can tell you one thing if Lincoln does not come out with an new version of the LS I will be investing in a BMW 5 or 7 series. I love my LSE without question and I'll stay brand loyal if need be. Lincoln needs to compete and compete aggressively.