Their next project will definetly not be one for the PS4, that's for sure. Sony will want to push them to make something even more impressive on the PS3 to show off the power the machine is packing.
Killzone 3? No idea, but it could be. Though it seems GG have their area of expertise in FPSs, so I think it is safe to say their next game will be a FPS.
EDIT: And of course they will be able to get more out of the PS3. You will never not be able to get more out of it, but at some point the differences become so small you barely notice them anyway. I have no idea how much better their next game will look, but I doubt it is going to be a big jump over Killzone 2.







