This is blatant self-promotion, so apologies if that's not allowed and feel free to nix this topic.

Anyway, I recently interviewed Feargus Urquhart - ex-Black Isle, currently of Obsidian - and asked him about the chances of seeing Planescape Torment 2. He wasn't entirely against the idea, as his answer shows:

http://pc-mmo.nowgamer.com/news/5797/obsidian-dev-ponders-planescape-torment-return

I'm not sure where they could really go with a Torment 2. I don't want to spoil anything (just in case someone has not finished it) but torment really is about TNO , his situation is quite unique, and none of the endings really leave much room for him to be a protagonist for a sequel.

They could make a new game in the same setting (though I believe planescape was never updated for 3rd edition) with a totally new hero and story (and maybe setting), but what would be the point of slapping the torment name on it except as a lame attempt to sell more copies based on the first one's following (similar to what happened with far cry 2)?

Planescape Torment is such a unique and self-contained game, that a sequel of any kind would almost certainly feel terribly forced. The original was such a labor of love for Black Isle that I don't see how any sequel could hope to live up to it. Planescape Torment is like a Citizen Kane or Apocalypse Now. The last thing it needs is a sequel.

Interesting interview though.

What it could use is a remake though to introduce this golden age classic to a whole new audience

But in the age of kids only loving Call of Duty and Halo, I fear the reception would be bad.
And Obsidian nowdays don't have the best record of making bug-free games. (Takes a look at Fallout: New Vegas and NWN2)

A remake that doesn't change anything and that keeps the atmosphere intact would be a dream come true... and a supposedly perfect sequel as well.

That would be impossible since they would have to upgrade the D&D rules to the 4th edition ruleset, which I never played, but I heard was extremely streamlined and dumbed down

I never understood the reasons, but it's something with the licensing of the Dungeons & Dragons name

They could use the Pathfinder RPG system which is often being referred to as D&D 3.75
That would probably give issues with the Planescape IP but I'm sure they could work around that.

4th edition rules are not dumbed down, just very different compared to older editions. I would say 4e rules are excellent for tactical turn-based combat, but are so "gamey" that if you are playing pen and paper version your immersion to the gameworld probably suffers.

The complete planes, as you know them from Planescape Torment (which was D&D 2.5, as far as I know), do not exist anymore.
The whole Planescape-Multiverse is not supported as a campaign setting anymore. Even in D&D 3.5 many planes where rebuilt or "deleted" and everything changed.
So I can't imagine, that the owner of the D&D license is going to let a game like this happen. And if there's going to be a new Planescape-title, it won't have much to do with the Multiverse you know from PST.
Sad, but true :/.

Interesting
I thought the Planes still existed since the Githyanki and the Githrezai still exist in DD 3.5 (As seen in Neverwinter Nights 2)
Tieflings as well

Will investigate!

I'd love to see another Game set in Sigil.
There's much more to it than just TNO's story.
I certainly wouldn't want a "sequel" in the strict sense of the word, but it's a pretty rich setting with a lot more that can be explored.
I wouldn't really care too much which Rules they used or even if they tossed them for a Ruleset unique to the Game.

http://www.gamebanshee.com/news/103049-chris-avellone-comments-on-planescape-torment-return.html

"The Planescape universe provides a lot of opportunities for great narratives and adventures. As such, Torment shouldn't be a constraint for further adventures in the universe - the story in Torment I felt ended as it should, and I wouldn't want to do a narrative follow-up to that title. The Planescape universe is a little too rich to start imposing a sequel framework on it like that."

A prequel seems possible, given the story. Perhaps a story about how The Nameless One got into his state.