Their website features a link that allows visitors to "REGISTER FOR ADVANCE INFORMATION on Frontier's forthcoming LostWinds sequel containing amazing new gameplay as Toku and Enril's incredible adventure to save Mistralis continues."
That doesn't really leave much room for misunderstanding, does it? The sequel's on the way. No hinting, no teasers, just "Hey, guys, we're making another one." Having a quickly-announced sequel makes it seem like an episodic title, doesn't it? We guess there isn't really that much difference between an episodic game and a game with really quick sequels.