This is Vegas still has a pulse. Speaking with G4tv.com, the publisher, which acquired the rights to the game during its acquisition of Midway, stated that the Sin City adventure had not been canceled and is still in production. Although there are no further details, Surreal Software has not been stripped of development duties.
We really haven't heard anything about This is Vegas since 2008, which is when it was originally supposed to release. We're following up with Warner Bros. now to see if the publisher would like to make a new release window -- we're guessing 2009 isn't in the cards.