The game is a bit of a mystery, but here's what we know: Dead Island is in development at Techland (makers of excellent Call of Juarez: Bound in Blood) and will be published by Deep Silver. It is set on an island and is an open-world, survival-horror game with a first-person perspective, but the idea is to focus on melee combat and RPG elements and it will feature a clear focus on story-telling as well as four-player, drop-in, drop-out, coop mode.
It's scheduled for a 2011 release on the PS3, 360 and PC.