Gaming site Joystiq reports that it will be called Amnesia: A Machine for Pigs. It will feature a wealthy industrialist who is haunted by dreams and disaster following an unfortunate trip to Mexico. [Joystiq]
Will it have combat this time around? I find horror games to be boring when there's no combat. Aside from the fact that it was Frictional's first game, this is why Penumbra was a better game than its predecessor. Having to fight off the dog at the start with a rock was scary.
If there's no hope of beating something when you face it, there really isn't any fear. If you have a hope of beating it, then you're actually risking something, and you will end up terrified.