All of the following info is taken from numerous news sources and SCREAM sites. Take it for what it's worth.
Wes Craven may not direct the third
film, but rather hand the film over to writer Kevin Williamson. Now people are saying that yes-Wes will in fact direct the film-but theres no confirmation yet on which it may be. When Wes Craven did a radio show in Los Angeles, he actually spilled some things about Scream 3! He mentioned the idea they are throwing around has Sidney Prescott (Neve Campbell) dropping out of college and going to Hollywood to become an actress. Wes also said that they are thinking about waiting a year to even think about filming it because Kevin Williamson is busy with his WB television show, Dawson's Creek, and Craven himself is doing a project with Madonna Called Small Wonders. And they want their full attentions when they go into the process of Scream 3. So this means That we may not get it till 1999. But hopefully Dimension as stated "They'll have us Screaming till the next century".
Matthew Lilliard (Stu from the first Scream) is set to return in the third installment. At the wrap party for the picture Dead Man's Curve in Baltimore, he let it slip that he would be returning for the third Scream movie as Stu's 'twin brother'. This would indicate that at least the story outline is fairly solid and ready to advance ahead soon. Neve Campbell has stated in so many words that she doesn't want to be known as the next Scream Queen (sorry hunny-you basically already are) and she wants to challenge herself in acting more. She doesn't want people to think Sidney and Julia are the only characters she can play. So-will Sidney be back for Scream 3? There's no telling at this point.
Courtney Cox has said though that she might in fact do a Scream 3 if her character survived (this was during an interview when she couldn't say much about the movie) Scream 2. So Gale weathers might just be in Scream 3!
Don't count on the Scream franchise to live forever though. "I won't be a part of Scream 4, 5, or 6," says Williamson. "I'm done. Three stories and that's the end of it." Of course, if there's many to be made, Miramax might squeeze a few more out anyway. "If we ever did get to a Scream 4," Weinstein says, "it wouldn't happen for at least three years, and there'd be all new characters and a whole new conception. Right now, though, we all see the franchise ending at three."
The following is from another fan-based website.
Matt Lillard is coming back in Scream 3 (maybe)
and will be Stu Macher's twin brother from the
original SCREAM. Now if he is in SCREAM 3,
Kevin Williamson and Wes Craven can use this
to their advantage by making him the killer.
If they use the third killer theory of the first
SCREAM they can easily say that the twin brother
was the invisible or not so invisible 3rd killer
in SCREAM. This would make the plot very
interesting.
FACTS ABOUT SCREAM 3:
If SCREAM 3 will ever be made, it will contain
more twists and turns in the story line than
that of SCREAM and SCREAM 2 combined.
This was said by Kevin Williamson himself!