That's the one - Skylanders. Apparently Insomniac hasn't made a Spyro game since 2000, so I guess that's where Spyro is now, whether or not you get to play him.
Reading up on this a bit, apparently Activision is just the publisher for Skylanders. They've actually several developers behind the Skylander series, including Toys For Bob, Vicarious Visions, Frima Studios, beenox and nSpace.
I haven't heard of most of those guys, but I have heard of Toys For Bob, which actually was behind the Star Control series
Kind of interesting to think that Spyro ended up being published by somebody else other than Insomniac. I wonder how a properly from a company that is typically published by SOE got into the hands of companies being published by Activsion?
I've seen some pretty sexy dragons. Granted, there's not a whole lot an accomplished furry artist can't make sexy.