Super Mario 128 - Future
Beyond the tech demo, Mario 128 has been used many times in the past few years, mostly in reference to an ever more distant "true sequel" of Super Mario 64. You can find a more complete listing of times Mario 128 has been mentioned since the demo on the Wikipedia article. Mr. Miyamoto and others mentioned "Mario 128" in interviews at least once a year, usually followed with information about the mythical game "launching next year." Nothing ever came of these comments. It was finally explained at the 2007 Game Developer's Conference where Mr. Miyamoto explained that the technology of Mario 128 has already been incorporated into games. Half of the technology went into Pikmen, where one could control hundreds of characters individually or as a group. The other half was put into the upcoming Super Mario Galaxy game, with unique gravity physics and perhaps other things. In addition, during the years we didn't know what was going on with Mario 128 (the game), there were rumors that the game would use a revolutionary method of switching between 2D and 3D. While that was only a rumor, that technology also surfaced in the game Super Paper Mario, released in April 2007.
What does this mean for the future of Mario 128? It means that Mario 128 is already here. The technology of the tech demo an many other experiments have already been put into games. Mario 128, as a single revolutionary, sequel-to-Mario-64 game will never happen. Except for talk of the tech demo, "Mario 128" are expected to be swallowed up into game history.