Knuth has declared that he will do no further development of TeX; he will continue to fix any bugs that are reported to him (though bugs are rare). This decision was made soon after TeX version 3.0 was released; at each bug-fix release the version number acquires one more digit, so that it tends to the limit π (at the time of writing, Knuth’s latest release is version 3.1415926). Knuth wants TeX to be frozen at version π when he dies; thereafter, no further changes may be made to Knuth’s source. (A similar rule is applied to MetaFont; its version number tends to the limit e, and currently stands at 2.718281.)
Knuth explains his decision, and exhorts us all to respect it, in a paper originally published in TUGboat 11(4), and reprinted in the NTG journal MAPS.
There are projects (some of them long-term projects: see, for example, the LaTeX3 project) to build substantial new macro packages based on TeX. There are also various projects to build a successor to TeX. The e-TeX extension to TeX itself arose from such a project (NTS). Another pair of projects, which have delivered all the results they are likely to deliver, is the related Omega and Aleph. The XeTeX system is in principle still under development, but is widely used, and the LuaTeX project (though not scheduled to produce for some time) has already delivered a system that increasingly accessible to “ordinary users”.
This answer last edited: 2013-05-21