NASA should finish ISS with shuttle and then send shuttle to the Smithsonian. Press on with CEV or whatever the next gen manned spacecraft is going to be... Just make sure to incorporate crew escape and a robust thermal protection system.
That is more or less what they are doing. There may be a few extra flights here and there, but for the most part, the shuttle will do only ISS construction and some resupply. At least that is the plan. We will see if this will really happen.
I have my doubts as to whether the CEV or any new manned space vehicle will actually fly in the next decade, however. NASA's standard pattern is to study any new spacecraft idea to death and then drop it. This has happened every time a new manned spacecraft since the shuttle has been seriously proposed by anyone. As others have said, there are to many entrenched interests that need the space shuttle. These interests stretch all the way from the Johnson Space Center to Boeing's and Lockheed's facilities on the West Coast. If the shuttle is to be replaced, these people will accept nothing less than a vehicle at least equally capable and expensive to operate. This is never said out loud but it does not need to be. Preserving jobs for voters in the right districts, profits for campaign contributers, and empires for bearaucrats are what matters.
The only way I can see the CEV being actually built is if one of these things happen....
1. It gets as expensive and pork-laden as the shuttle.
2. Some foreign government(probably China) puts up something else just as good and makes NASA, etc. look bad.
3. Some private group competing for America's Space Prize begins to approach NASA in capability.
4. Another accident forces the shuttles into permanent retirement. If this happens, look for number #1 above to happen as well.
The CEV wouldn't be that hard to build. Its goals are laughably easy. The Apollo command and service module did essentially the same things we want out of a CEV, except with 3 crew rather than 6 or 7. When there was competition, public pressure, and national prestige on the line, we built it with 1960's technology. Only government without competion could seriously be proposing to take as much time and money to build the CEV as NASA is planning to take.
SHORT...The shuttle(or something else almost as bad) will remain unless NASA gets some competition. In fact, nothing real will be done in space unless NASA gets some competition. This is just the nature of government.