There will definitely be a shortage at the regional level. It won't be in 2012, since the age 65 law took place in december of 07'. Add in hiring back furloughes first, and movement should start in mid 2013 or so. There will be a ton of pilots retiring at the majors (19000 over ten years), that will have to create movement, even if one of the big carriers fall. These numbers don't even add in hiring at the fractionals, which will do better once we're out of the recession (has to happen eventually).

I'm not being optimistic, just realistic with real numbers.

As for working at the regional level, the regional work rules are slowly getting better. Anyone who wants to be a captain and making captain wages will be one after jumping in on the next 10 year wave (sucks to wait until 2013 for movement!). Most captain make at least 60K a year, which isn't bad compared to some other job sectors out there (I'm not arguing that it does suck in historical context of what pilots make and the responsibility that goes along with keeping the safety of a group of passengers).