Oops. Disregard my comment. I thought the screenshot posted was of Mythos renamed to Torchlight being worked on by whoever Hanbitsoft is having develop the IP. But Torchlight IS Runic's game. It's great to see screenshots already!
And take a look at Runic's page. Recently they had this art contest as a way of getting candidates for an open art position. But now they say they filled it and it's just cool that they are quite open and honest with the community and that to me is a big reason why I was into Mythos.
Going against D3 is just about impossible but I think a similar model as Mythos could still fit in and not directly compete with D3. If you remember towards the end of Mythos they all of a sudden went to trying this MMOish world, along with a 3rd person view. And with Mythos they were going with free to play with microtransactions.
I'm not sure where D3 is other than 2010 probably, but I wouldn't expect Torchlight until 2010 either. But I think it is likely to be simpler at first. Not that I mean dumbed down, but that they won't try to do too much at once. In interviews with the Flagship guys, they acknowledged that hurt Hellgate.