I wonder what the hold-up is.
Basically, the highly trained monkeys that are running Square decided that announcing a game to the public at least a
full year before you actually start development was a good idea, and that working on five
other games to competition before dedicating a full-sized team to that game was an even better idea.
http://www.youtube.com/watch?v=YiIx9VJWSl8 is what a relatively small team had managed to pull together over the last six years. At some point they moved the game to an entirely new engine developed specifically for Versus XIII, as well as using their next-gen engine Luminous Studio for the game's lighting. Whether that happened before or after this trailer was released is unknown, but the game entered full production in September.
The good news is that Final Fantasy XIII-2 only took two years to bring to market. Assuming they even have half of Versus XIII finished, it should be able to make a late 2012 release in Japan. Seeing as Square is actually halfway decent with localization times these days, we're looking at a Q1 release for North America.
In other words: Find something else to play and pray that they don't [censored] this up.