I, personally, think Jack is dead.
Now, it's a game, anything could happen, but I doubt Lionhead is going to bring him back, at least back to life.
Quite frankly, I don't care either way. Jack was cool, but there are much cooler villains out there (not just in Fable), to obsess over.
Hell, I could take the description of Scythes Warhammer, that Lionhead will bring Scythe back to us, but I doubt that.
A lot of people have this idea that Fable is going to keep coming out as a series, something like Final Fantasy. I doubt it.
I've seen companies like Lionhead last for a few years, then out of no where, they crumble due to some unforeseen event. Could be a lack of funding, MS giving them the boot or vice versa, or an important figure within Lionhead dying or leaving the company.