The DMR was developed and produced in collaboration with Imacon. Leica was not their top priority so development schedules were continually pushed back. As to why DMR production and firmware updates stopped... easy, Imacon was merged into Hasselblad. Hasselblad reigned in resources to work on in-house projects and Leica was left high and dry with no recourse. As others have mentioned, the DMR still produces phenomenal results. Perhaps some might recall a certain thread comparing the 10MP DMR to the 16.7MP 1dsII, where the DMR posted superior and more pleasing results consistently, despite the Canon having a 67% pixel advantage with a larger FF sensor.
The R lenses will be able to be used on the next R camera, which will come next year as Leica has already said. New AF R lenses will take the system forward. I don't see Leica abandoning R at all. They just decided they could have more market impact by getting the S2 out first. All the technology is shared between S and R, so it is pretty safe to assume that the next R camera will be a baby S2. If the S2 is as good as it promises to be (and as good as I've experienced personally in the prototypes), the R will be equally so, just in a smaller format.
The M8 and now M8.2 has been my daily camera for the last 2+ years. It travels with me wherever I go and I am continually surprised at the quality such a small camera produces. I don't mind the IR filters and haven't had a single camera problem myself. Out of the many, many M8s that I've sold, none had electrical/freezing issues and only a few (M8s, not any M8.2s so far) had misaligned rangefinders. Since I tested them with my customers before they left the store (or shipped them out), I was able to just swap these ones out with a new, perfect one, and send the one with bad rangefinder back to Leica. I guess this falls under working with a good dealer from the start, just like with MFD.
Would I like a FF M9 with lower noise beyond 640 ISO and a bit higher resolution? Of course, but I am not suffering today and I routinely make outstanding 20x30 prints from my photos. I use a WATE and am totally satisfied with the wide angle coverage at 16mm. I don't shoot sports and have no more need for additional fps.
And, just as Leica worked with Imacon on the DMR, they partnered with MFD company Jenoptik to design the hardware and firmware of the M8. Kodak sold them on the IR filtration on the CCD being adequate (I've seen the spectral sensitivity chart and the IR allowed to pass certainly looks minuscule and insignificant). I was a beta tester for the M8 back in August 2006. Shooting over 1000 shots in four days, from a professional location fashion shoot with strobes, to street shooting, night shooting, and whatever I could point a camera at, I never noticed the IR issue. Why not? The reason was simple - no one wears black synthetic fabrics in August in Miami! Once winter hit up north and the black fleece came out, all bets were off.
FWIW, I've tested a Nikon D70 and it has IR bleed that is far worse than the M8. Test one for yourself to see. The D70/D70s was one of the most successful DSLRs ever for Nikon, selling about 1 million cameras. No one noticed. No one cared. Yes, the Leica was 5 times the price, so it was held to a higher standard. Leica didn't have to provide two free IR filters, but it was the right thing to do once the problem was identified.
With the S2, Leica has learned their lessons of the past working with technology partners. The S2 was developed and designed 100% in-house with fresh new talent working side-by-side with experienced camera engineers. The S2 went from a drawing board idea to full-working prototypes with real lenses in less than six months (April 08 - Sept 08). We probably would have seen the S2 earlier (and possibly an M9 and/or R10 as well) if Steven Lee hadn't been at the reigns. He shelved the AFRIKa project indefinitely a few months before he was removed from power. He also rushed the M8 to market before it could be thoroughly tested and vetted. His philosophy was that it was better to be on time than to be 100% right. Luckily, Lee is no longer calling the shots. Since Christian Erhardt has taken over Service in the USA, turnaround time has been reduced to 50% of what it was. He successfully orchestrated over 1000 M8 upgrades in the US with an average turnaround of one week. Christian is currently putting an S2 support staff together and organizing the professional service necessary for a product like the S2.
A lot of money, thought, and planning has gone into the S2. It will be on time and it will be done right. The already stable platform in prototype stage will be that much more so in the production model. I understand the skepticism to some degree based on past misgivings, but I'm confident, based on what I've seen and what I know, that the S2 will be a reliable, dependable, robust, and truly professional system. Pricing, I'm assured by Leica, will be competitive. Not a fairy-tale at <$10K (let's be realistic, folks), but comparable to P45+/H3DII-39. And I don't see anyone complaining how much more the P65+ costs for what Jack has pointed out is incremental gains.
I apologize for the long-winded post, but I felt that some history needed to be clarified from an insider's perspective.
David