Originally Posted by The original, undoctored Article
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.
I love quotes with deleted parts. I live to fill in sentences to show the truth![/sarcasm]
As you can see, it is just speculation, and they don't know if it's true or not.