As you already know, Lufia III ran into some considerable delays. You probably heard that at the earliest, the game will resume production in late 1999. Yes, that's 1999. This is because currently Neverland Company, the developers, are trying to decide who will end up with the publishing rights to Lufia III, since Nihon-Flex is bankrupt. The rights will hopefully get picked up late next year when Nihon-Flex gives them up.
If you've been paying close attention to things, you've noticed that Natsume, the American publishers, now gives a 4th quarter '99 release date on their Website, instead of the previous 2nd quarter date. Whether or not Natsume was just misinformed is unknown. Don't take this to mean that you'll definitely be seeing Lufia III next year, though.
The following information is based on the existing development version of Lufia III. Any information is subject to change.
Several sources have described Lufia III as being more of a traditional RPG, with fewer puzzle elements than Lufia II. The actual appearance of the game is similar to games like Final Fantasy Tactics, Tactics Ogre, and the Japanese game Energy Breaker, by Taito. However, Lufia III will use bitmap graphics rather than having a fully 3-D polygonal environment. (Like Tactics Ogre.)