I'm so glad Bret and Jemaine are doing different things with their careers. This movie sounds awesome by the way!
Here's a little article from ShockTillYouDrop:
There doesn't seem to be a release date at the moment, late 2009 to early 2010 seem logical, but I'll keep you all updated as more info comes in.Conchords Cast Flies into DeathSource:Screen DailyMay 15, 2009
Lightning Media is reinforcing its upcoming distribution slate with a horror-comedy called Diagnosis: Death.
The tone of director Jason Stutter's film is said to be in line with Peter Jackson's early works. The story, co-penned by Stutter and Raybon Kan, concerns two people undergoing a radical treatment for cancer. Locked in a medical facility over a weekend as guinea pigs for a drug trial, they discover the clinic may pose more harm than they could have imagined. The drugs cause hallucinations. Or are they seeing ghosts for real? Struggling with their senses, they must team up to solve a haunting secret.
The Flight of the Conchords Bret McKenzie, Rhys Darby and Jemaine Clement star with Raybon Kan, Jessica Grace Smith and Suze Tye.
Update:
So it sounds like Bret and Rhys have a bigger role than Jemaine who is said to have a cameo appearance. Here's a better article at Stuff.co.nz