Don't believe it. VB is alive and well. The VB team is busy working on the next version. You're right, VB is alive and well. My friend Don Demsak (aka DonXML) has worked with the VB team and is very excited about the next generation of VB.NET.
Still, there are language aspects (on both sides) that are puzzling. Take .NET Generics - they're available in both C# and VB.NET, yet the lack of anonymous methods in VB.NET seems to detract a little from fully utilizing generics.
Overall, I do like VB2005, it's many times better than VB2003.
Kevin