A source close to the development of Shenmue 3 has informed me the following:

Shenmue 3 begun development shortly after the cancellation of Shenmue online.
It will go multi-platform. it will be release on all 3 platform.
A virtua fighter character will make an appearance in Shenmue 3.
Shenmue 1 and Shenmue 2 will be upgraded with next-gen graphics.
Shenmue 3 will have online play!
There are 15 new characters to be introduce in Shenmue 3. They will play an important role in the storyline.
Shenmue 3 will be the longest game ever created. It is so long that it will take players no less than 120 hours to complete with sidequest included.
players will be immersed in the world of Shenmue. It will have so many things to do that it is almost like living in the world of Shenmue.
It is expected to be release worlwide. A release date has not been decided yet. But our source says that it might get release first quarter of 2009.
Expect a big update on Shenmue.com within the following months.