IGN Predicts 2006, Part One
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LucasArts' recent silence by no means equals inactivity. On the contrary, Knights of the Old Republic 3, which we believe is in development with Obsidian Development, is in the early stages of creation for a late 2006 -- most likely a 2007 -- release. The game should feature more seamless interaction between NPCs and the lead character, as well as better, more economic interactions between party members. We predict the combat system will go entirely realtime, as opposed to partially realtime (the way it was in KOTOR 1 and 2), and RPG fans will be able to enjoy more distinct shades of gray recognized by characters instead of the black and white distinctions made in the first two iterations of the series.
You'll want to file this one under "Pure Speculation" for the time being, though I wouldn't doubt that it's fairly close to the truth.