The NMS will come out sometime during 2011. NMS is just the development name for the Passat replacement. They will reveal it in Jan at the Detroit Motor show.
Early sketches make it look a lot like the B7 Passat, the one that was just released in Europe and it's planned on using a TDI engine. It'll most likely be the 140hp Jetta engine but I'd like to see the 170hp 4 cylinder TDI engine in it since it could also be used in other cars like a GTD (GTI TDI).
However, VW has made it clear that it's not going to be like the Passat. VW is decontenting their cars to make the cheaper to build and buy. The Euro Passat will have more options than most North American Mercedes, like adaptive beam headlights (they dip, corner, AND change the beam shape with a block off shield that prevents glare on other cars), cooled/heated seats, and more luxury features. Than again, a Euro Passat would cost as much as a Mercedes if you added all those options.
You could take a look at the 2011 VW Touareg TDI - it's currently the most luxurious VW TDI.