We heard just last week that J. Allen Brack said Blizzard was definitely considering a graphical overhaul for WoW in the future (something players have been asking about for a while), and now WorldofWar has asked Brack to clarify exactly what's going on with the game's graphics. And he's answered. He says that Blizzard's approach to updating the game's graphics will likely be very different than other games' attempts -- they want to do it organically and iteratively rather than all in one go.
Which follows with what's happened already -- Burning Crusade got a few tweaks and upgrades, and Wrath has its own. Not only will they implement that shader system we heard about way back, but the shadows for each model ingame will be updated (and real-time, very cool), and Blizzard is increasing the view distance (to help out with vehicular combat, we hope?). But other changes, Brack says, will come in waves, not all at once.
He does mention an upgrade of how the water in the game looks, though of course he doesn't say when that might happen, only that Blizzard is looking at it. But it seems like a pretty sure bet not to expect an upcoming content patch to be "the graphical update patch." Blizzard is improving the way the world looks, but they're doing it one step at a time.