The game was not cancelled recently, as the game was a prototype worked on at the studio from 2006 to 2007 according to the story-breakers at Gamasutra. Ensemble was known to be working on console games and MMOs in 2006 but no details were announced at the time.
A screenshot gallery has emerged of the prototype, showing concept art of locations, characters and monsters that resembled--but were not acknowledged--parts of the Halo universe. In-game mock-ups of the prototype appeared to borrow more than a few elements from Blizzard's monolithic MMO World of Warcraft.
I'm glad it was canceled, I can't see it being any good.