will the latest firmware update allow audio monitoring through the a/v out jack? if so, can the volume be controlled?

I think it can be monitored already. It is line level (−10 dB) so you can't just put earphone on it. You'll need a small amplifier. Maybe there is a hack to make an amp from an old MP3 player....

I should have said monitoring through headphones. Apparently the magic lantern software has output level control. I would like to know if it works and if the level can be adjusted.

No. Not without an amplifier.

I thought I read you can. Why not install it and find out?

"I also was able to get headphone monitoring up."
http://www.dvinfo.net/forum/canon-eos-60d-rebel-t2i-eos-550d-hd/473788-magic-lantern-6.html

Output is currently through the USB port, so you'll need an adapter or headphones with the same kind of audio-to-USB interface that Canon chose uses. In early test versions, audio would come out so hot that it would clip headphones, so I don't think volume is a problem.

However, the way ML now handles audio monitoring may be completely different than the aforementioned test builds. As such, I have no idea how it works now, I just know it is possible to get a very loud signal out of the camera.