Great interview over at toonzone with Bryan Konietzko and Mike DiMartino. Although they says they are extremely involved in the Avatar movie I still have my doubts… esp about live action. But they also announced the possibility of a new Avatar Project:
TZN: Can you say if [the new project is] Avatar-related, or is it something new? DIMARTINO: Yeah. It's a new incarnation of the Avatar story.
Hopefully this will be all new story and just not a retelling of Avatar in some other format. This is such good news after hearing the show was ending.