We seriously need a sticky thread answering questions about this, methinks.
A few FAQ's I've seen here and other places:
Q: Do we have any proof? Will KotOR III be made?
A: At this point, we don't have any proof and we don't know if it's going to be made. Everything we know is just rumours and speculation. LucasArts hasn't announced anything yet. On the other hand, LucasArts hasn't denied anything. So, KotOR may or may not be published.
Q: When will KotOR III be released?
A: It hasn't been announced yet. Well, how would we know the release date if we don't even know if the game is going to published or not? Possibly in mid or late 2007.
Q: If KotOR III is made, which team will be the developer?
A: At this point, we don't know. However, most likely it will not be BioWare (developer of KotOR I) since the team is busy with their other projects. The best guess we can make is Obsidian Entertainment (developer of KotOR II). According to some reports, Obsidian and LucasArts have been in talks about KotOR III since August 2004, but we know nothing for sure.
Q: For what platforms will KotOR III be published (if it's published at all)?
A: Too early to say. According to some rumours, KotOR III will be exclusively published for Microsoft platforms only, but your guess is just as good as mine, nothing is sure. My guess is that the supported platforms will Xbox 360 and PC.
Q: Will KotOR III continue the storyline started in KotORs I and II?
A: If it's made, most likely.
Q: Is it true that KotOR III is the last of the series?
A: We don't know.