After the (sad) demise of project jefferson, the future of BIS looked pretty bleak, from the fans' perspective, but since Interplay and WotC fragged BIS over due to Jefferson, us fans felt that FO3 was probably the best next project to tackle, since BIS need'd have worried about D&D rules and crap.
Sadly, licensing and financial issues (at that time) came into play, and F3 looked unlikely, as BIS annouced that Jefferson was indefinately suspended and that they would concentrate on their platform games for the time being. We basically has to be satisfied with IWD2....
Shortly after that, a new game was reportedly under development, codenamed Van Buren (BIS code all their projects with the names of US presidents. I want to see what type of game Clinton will be). Van Buren might be FO3. we hoped. Supposedly Van Buren would have hit the shelves early in 2004, but then J.E. Sawyer left (head designer, and all-round great guy), which made the fans howl in anguish. FO3 is probably the most anticipated game in the CRPG community, and Fallout is definately the BIS ghame with the most fans. And our opinion is that Interplay should go **** itself.
I just visited BIS's sub-forum at
http://forums.interplay.com
Doesn't seem like much has changed in the last couple of weeks. Officially, Van Buren is still to be released next year, but Interlpay's track record at canning games in pre-production doesn't bode well, especially considering the silence on their pasrt of late. And then Van Buren might also not be FO3.
Hope this answers your question.