Last time we heard about it, Blizzard sad it will be no diablo III. Recently Blizzplanet interviewed Richard A. Knaak. He was in Slovakia at Istrocon. Richard A. Knaak is a well known novel writer and in the interview he discussed details of the last part of Diablo: The Sin War trilogy. Also (thank you God!) he reaffirmed his opinion that Diablo 3 could be in the works.
When Kazo asked Knaak if he had Diablo 3 character.
Knaak chuckled and sad: A … DIABLO 3 !!!…. Character? I can’t say anything.
I am also happy to announce that more novels based on Diablo are planned through 2008-2009, and not just from Knaak, but also, according to him, from other writers.
On the World of Warcraft side, Knaak confirms World of Warcraft: Night of the Dragon and the Burning Crusade Manga, both expected on 2008, will lay the path to the events that lead to World of Warcraft: Wrath of the Lich King expansion pack with Rhonin becoming leader of the Wizards of Dalaran to rally against Malygos - Dragon Aspect of Magic. Malygos will be a 25-man raid dungeon boss. Watch the video interview for more.

Knaak, who was very disappointed that Blizzard didn’t, announced a Diablo III at Blizzcon 2007 is not sure if he will write any more Diablo. Since he just finished Diablo: The Sin War Trilogy, which introduces the groundwork for the Diablo.
He says that at this moment it is at a stage too early to say what, but he hopes to continue working with Diablo. He, and I thinks that the Diablo world still have much to give, even if its old it is still a very popular world, and there’s still much to explore.
Blizzar, Diablo III, Richard A Knaak