http://kotaku.com/gaming/homecoming/fatal-inertia-returns-to-ps3-279577.php

Well! The game is back on the PS3, it seems. Koei Chief Operating Officer Kenji Matsubara took the stage at Sony's Japan press event PLAYSTATION PREMIERE 2007 and showed titles headed for the PS3: Ni - OH, BLADESTORM and Fatal Inertia. Not sure if an official announcement was made or if, you know, Fatal Inertia was just slipped back in.

It left?

Yea I thought it was 360 and PS3. I dont' think it ever went off.

 Yes, only few weeks ago it was announced as a 360 exclusive. Now that's been changed again.

In a few weeks it will be announced as a Wii exclusive, only to be confirmed for the 360 and PS3 again. At that point, it will change to a GBA exclusive, becoming the next Duke Nukem Forever joke.

 I don't think it actually left the PS3, but they did say that they were going to put it on hold until the Unreal Engine is finialized on the PS3 or something like that. 

Correct, they said it would be delayed indefinitely until they could get the engine working. It's running on the Unreal Engine and since Epic seems to be chugging along with UT3, perhaps the engine has been tweaked to an acceptable level to continue PS3 development.

Delayed indefinitely was interpreted by most as the PS3 version being scrapped. Apparently that indefinite delay was very short.

It's still delayed indefinitely if you go by the definition. It has a September 11th release date for the 360, and no release date for the PS3. :p