Well it looks like at least one iPad 3 rumor was correct. Apple will officially announce the next generation iPad next Wednesday, March 7, at the Yerba Buena Center for the Arts in San Francisco at 10am PST. The invite's tagline reads "We have something you really have to see. And touch."
The next generation iPad is rumored to feature a high-resolution Retina Display (2048-by-1536 pixels), an improved camera and Apple's A5X chip with improved graphics engine. There have also been reports that Apple will announce an iPad mini, but I highly doubt it.
A more likely scenario is that Apple will not discontinue the iPad 2, and offer it at a lower price to compete with cheaper tablets like Amazon's Kindle Fire.