Just got this update via the great kids at Revelations, from the New York Times:
At this point, the Disney team hasn't done much work on the ''Abarat'' project beyond dispatching designers to come up with the distinctive, palindromic Abarat logo that adorns the book jacket, knowing that they might have to live with it on the movies, rides and merchandise yet to come. (Cotler says HarperCollins liked the design and welcomed the assistance.) The studio is waiting for the delivery of Barker's second ''Abarat'' book before commissioning a screenplay. But Thomas Schumacher, president of animation at Walt Disney, is tantalized by the possibilities. ''I have a vision for what can be on the screen in the future that can't be on the screen today,'' he says, ''things we have built at Disney that people don't know about yet and will be startling. It will be fun to do these characters, like the guy with the heads on his antlers, with puppetry and animatronics and computer animation and styles of paintings."
Sounds pretty damn promising to me!