Yes, the rumor has been that schools will see an increase in applications this year. Time will tell if that is the case. Schools had not seen an increase in the first round, but the expectation is that it will be in the second and final rounds. In the event there is an increase, then competition will be tougher this year. However, there is capacity in the business school marketplace and you should not delay an application if you feel you are ready to go to business school. You just might want to apply to 1 or 2 more schools than you originally planned and are more of a safety option for you.
With regards for next admissions cycle (fall 2010 entry), it will depend on whether or not layoffs continue through the last half of 2009 and early 2010. If companies continue to layoff professional staff, then it is possible competition will still be up. However, if the market stabilizes, then it is possible applications will be flat or even slightly decrease the following cycles. Much like the ups and downs of the financial markets, business school admissions has its ups and downs--which usually mirror the economy only with about a 2 year lag.
Hope that helps and makes sense.
Lisa