Here's something i found on yahoo while ago.
George and crew are most pleased with the initial performance of KOTOR, so pleased in fact that KOTOR 3 is well into development! This time however expect everything to be new and improved! An all new next-gen engine is being prepped as is a modified battle system that will place a heavier emphasis on the lightsaber. There are even whispers that the game may be shown in some form at E3 THIS year, though I