It's official, Elijah Wood will return to the role of Frodo Baggins, and this is how this will be possible.
Source: Elijah Wood Reportedly Returning To Middle-Earth For ‘The Hobbit’ Cameo » MTV Movies BlogAs readers of “The Hobbit” know, the tale of “The Downfall of The Lord of the Rings” and “The Hobbit or There and Back Again,” are contained in the fictional “Red Book of Westmarch.” In Peter Jackson’s LOTR films, the books are shown on screen and written in by Bilbo and Frodo and handed off to Sam Gamgee. (Not explained on film are Sam’s progeny later having the book and being Wardens of the Westmarch — hence the book’s title.) The fictional book, and either the telling from it or the reading of it, will establish Frodo in the films experiencing Bilbo’s story. Viewers to learn the tale of ‘The Hobbit’ with a familiar Frodo getting the tale as well.