It's basically modelled off of Gold/Silver at the moment. I'm not sure what the major plan is, but initially I would say they are gonna complete Johto then Kanto. I would love them to incorporate all regions into the game, but then in the same light, it would break the Generation 2 feel, which is why I love this game so much.
I wonder if it would be possible to compartmentalize the game.. i.e. "New Game" -> Generation 1, 2, 3, "who cares, any/all!", etc. I guess that'd mess with online version though.
With community Modding though, I'm sure other players will eventually create the other regions, if they are not in the process of it already.