The Criterion Collection now has a blog, and the 21 November 2006 entry mentions this tidbit:
Salò:I knew you guys were both, um, torturing yourselves over missing out on the original Salò DVD before it went out of print, but now you'll have the chance to pick up this new version next year. And the new transfer should really let you get a better look at the, um, festive goings-on depicted in the film. So, um, Happy Thanksgiving!
Have we been able to renew our rights? Well, here's the answer you weren't expecting. Yes. We’re working on a brand new HD transfer now. It'll be a totally new release and be out in 2007.