1.2 is the culmination of years of punBB evolution and incremental refinement. It is the most stable, solid and widely implemented code base here. I think the old saying applies: If it ain't broke, don't fix it! Of course in the unlikely event it does break, do fix it (and apply security fixes as well), but its features should be frozen to keep the many current 1.2 users running smoothly.
1.3 should not be released until it is really truly finished (i.e. its requirements are met). Call it 2.0 if you must (and with all the major changes, this is probably a good idea), but I see no problem with staying the course and keeping it 1.3. (After all, there is historical precedent in the project's version numbering system - yes?) But please, take whatever time is necessary to: Do it right the first time! The developers will need to put up with some impatience from the community (some of whom may even leave), but once it is done, and it is good, all will be forgiven and happiness will return.
But beware of feature creep. It can kill a project - (it killed the last company I worked for due to delayed release). When working on a major project (like FluxBB), it is very easy to think up new improvements that can be made, but one must not succumb to the temptation to incorporate them right away if they require significant design changes. Thus, to be successful, it is critical that the software requirements be well defined in advance and once those requirements are met, then it is done. Period.
For me, the extension system is the main requirement for 1.3/2.0. And I don't mind waiting for it, but I would like to be informed of a ball park release date, because if it is realistically 6 months to a year (which seems to be the case), then I'll just go ahead and (happily) use 1.2 in the meantime. (One thing I've learned in 30 years of programming is that software always takes longer than your first estimate - frequently: 5-10 times longer!)
Cheers and keep up the good work. Good thread BTW.