DLC is confirmed, but what it will actually be is still a mystery.
This statement from Critierion Games about why Xbox users are required to have a hard drive states that it's because they plan DLC and wanted everyone to be able to see it even if they don't buy it.
Criterion Games > Burnout > Burnout Paradise > In The Press > Features > Xbox 360 HDD/Online Statement
That sounds like new cars, meaning if you come across someone driving a new car that you didn't buy, you can still see it on your screen (because the models for it were downloaded to your console's HD), but you can't personally drive it (because you didn't pay for it).
Hopefully the DLC will include more than just cars. I have 81 cars and drive less than 5 on any regular basis. Unless there's a 10/10/10 stunt car that handles perfectly, I have no use for anymore cars. Maps expansions (with new events, jumps, billboards, smashes), and online marked man and road rages would be the best additions.