To developer Level 5's credit, WKC2 will include an updated version of the first game with new systems developed for the sequel. It is certainly an interesting requirement, however, considering that WKC is not a short game. I understand the desire to have players be familiar with the story that will be picked up in the second title, but requiring a finished playthrough is a bold move. Imagine if BioWare required a Mass Effect completion save to play Mass Effect 2. Thankfully, PlayStation 3 save files are easily shared and distributed on the Internet.
Additionally, Japanese gaming magazine Famitsu has details on a new White Knight Chronicles game from Level 5 for the PSP, which has been translated by Andriasang. Dubbed "Shirokishi Monogatari: New Project" or "White Knight Chronicles: New Project", the title will begin "a completely new White Knight Chronicles" as White Knight Chronicles 2 wraps up the original story on the PlayStation 3.
Details are slim, but some teaser text promises "a new world" as well as character images listed only as "male avatar" and "female avatar". It remains to be seen if this franchise will continue to be released outside of Japan. No announcements have been made for WKC2 or this new PSP title as of yet.