Norton's enthusiasm has swung from hot to cold over the last few months, reaching a peak after it was reported that Joss Whedon would be directing the film. General consensus is that he would definitely be there if Marvel asks him to.
Now it's looking like that may never happen, as Hitfix sites a source within Marvel Studios who says that they have decided to go in an entirely different direction and cast an "unknown" as The Hulk.
That doesn't seem to make a whole lot of sense. Sure, Chris Hemsworth is a virtual unknown to most people as Thor, but by the time The Avengers comes out he definitely won't be. Is it a money issue? My personal opinion is that the script, written by Zak Penn, must not have The Hulk as that much of a factor in the story, and Marvel felt that it wouldn't be worth it to pay Norton's asking price for a limited role.
That's just my opinion. Nothing is confirmed as of now, but I expect news will be soon to follow.