Yeah, he's got tons of material, so he'll defintiely be releasing another studio album in a year or so.
But Scratch My Back is utter magic; he takes songs that are (for the most part) nothing like his music and totally makes them his own. And yes, it is very mellow; but it's gorgeous. Really a great effort.
EDIT: another thing to take into consideration is the absence of electric instruments and percussion. This was a challenge Peter posed for himself and his fellow musicians. The entire album consists of vocals arranged around orchestral/piano accompaniment. It's very interesting.