An article from filmforce.ign.com said in October that writers were hired to write a screenplay for Prince Caspian as the follow-up to The Chronicles of Narnia: The Lion, The Witch, and The Wardrobe (Prince Caspian is actually the 4th book in the Narnia series...but it has the four Pevensies, Lucy, Edmond, Susan & Peter, in the story...none of which are in the 1st and 3rd book) Apparently, according to NarniaWeb the writer is supposed to be Douglas Gresham (a co-producer of Lion, Witch, Wardrobe and the voice of the radio announcer, and the step son of C.S. Lewis & Joy Gresham).
But...according the article from ign.com it said that Disney wanted to wait until they were able to see whether The Lion, the Witch, and the Wardrobe was successful.
Well, that was in October, so since December when the movie came out it's obviously been successful. (According to boxofficemojo the film in its 41st day over 265 million dollars in the US, and a combined 530 million dollars world-wide SO FAR).
Walden Medio CEO Cary Granat said in a January 9th, 2006 article in Variety that the script is still underway, and that they are in the process of securing a director and that production is slated to be started in the 4th quarter of 2006.
Well, according to a brief in the online newspaper The Guardian, Andrew Adamson (director of Shrek, Shrek 2, and Chronicles of Narnia: The Lion, the Witch, and The Wardrobe) will return to direct Prince Caspian. Which seems like simply great news for Narnia fans and gives further hope to this movie becoming a reality.