The latest update on progress on Heroes of Malkion indicates that artwork is still in progress. Moon Design hopes to have it out by the end of the year, which indicates that it will probably be out before the new edition of HeroQuest. (Nonetheless, it does duplicate a lot of information in the main HQ1 rulebook, in order that it can be used by those who only have access to HQ2).
Personally, I'd take the 'end of the year' estimate with a bucket-load of salt; these things are always statement of hope rather than any definite publication deadline. But... well, hopefully by Tentacles, eh?
In the meantime, here's a wordle from chapter 2 of the book (for the uninitiated, a wordle is an artistic representation of which words appear most frequently in a piece of text):