The LaTeX3 project team (see http://www.latex-project.org/latex3.html) is a small group of volunteers whose aim is to produce a major new document processing system based on the principles pioneered by Leslie Lamport in the current LaTeX. It will remain freely available and it will be fully documented at all levels.
The LaTeX3 team's first product (LaTeX2e) was delivered in 1994 (it's now properly called "LaTeX", since no other version is current).
LaTeX2e was intended as a consolidation exercise, unifying several sub-variants of LaTeX while changing nothing whose change wasn't absolutely necessary. This has permitted the team to support a single version of LaTeX, in parallel with development of LaTeX3.
Some of the older discussion papers about directions for LaTeX3 are
to be found on CTAN; other (published) articles are to be
found on the project web site (see
http://www.latex-project.org/articles.html), as is some of the
project's experimental code
(http://www.latex-project.org/experimental). You can
participate in discussions of the future of LaTeX through the
mailing list latex-l. Subscribe to the list by sending a
message 'subscribe latex-l <your name>' to
listserv@urz.Uni-Heidelberg.de
This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=LaTeX3