Diablo 3 has been mythbusted. There is no Diablo team anymore, hence the sloppy 1.11 patch coded (many times over!) by the WarCraft team.
What they're really working on: World of WarCraft Expansion.
Clearly most of the people Blizzard employ are working on World of Warcraft. Seriously... they have 5 million subscribers.
Burning Crusade looks awesome; I'm really looking forward to it.
Incidentally, I'll be making a post in the WoW boards soon regarding the new Priest talents! I'm really looking forward to trying out Power Infusion.