Yes, the delay is real... unfortunately. Apparently, there is still some development being done and there are features still being added.
From a sales standpoint, it also makes sense as attention won't be diverted from Super Mario Galaxy. There are signals coming from multiple publishers that the trend of heavy doses of 4th quarter releases may be changing. Grand Theft Auto IV and Super Smash Bros. Brawl are both now slated for 1Q 2008, which gives both Take Two and Nintendo almost-guaranteed hits early next year.