It's designed to be the replacement to 400, yes, in the same way that USB 1.0/1.1 was replaced by USB 2.0. Firewire 800 is backward compatible, meaning 400 devices work with it, albeit at a lower speed.
The kinds of devices you can expect to utilise Firewire 800 are the same kinds of devices you can expect to utilise USB 2.0, namely consumer electronics of all types (eg. hard drives, Apple products), plus an alternative to ethernet in networking.