Hiring will go up as more pilots retire, but the big question will be "Who will be doing the hiring?" If United or USAirways goes down for the count, their A320 and 737 pilots will be much more competitive for hiring than a RJ captain with 1000 hours total PIC.
Hiring will pick up as the economy improves. A year is a good guess and fits the projections in the business section. The legacy airlines are still parking aircraft and this won't change. They will downsize their fleets and outsource their domestic flying. All age 65 retirements will do is preventing furloughing, not induce hiring.
Speaking of age 65, not many pilots I've talked to about it plan on sticking around until age 65. Many are looking at 62. Even if they wanted to stick around until 65, many won't be able to maintain a First Class medical due to a lifetime of indiscretionary health habits. The number one reason most people of all occupations avoid early retirement is the lack of medical insurance until Medicare kicks in at 65. Airlines could induce earlier retirements by addressing this problem.
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