So, what is Diablo 3's story? Diablo 3 takes place 20 years past the events of Diablo 2. Deckard Cain is still around and is convinced that hell is going to invade. He feels as though he is responsible for what has happened. Unfortunately, he is not well received. The events of Diablo 1 and Diablo 2 are seen as legend. The regular people think it is a myth because they know that they would never be able to face evil of that magnitude so they write it off as nothing. However, hell hasn't invaded yet, despite Cain's warnings so as time goes on, the likelihood of a myth gets higher. Tyrael is also still missing, no one has talked to him and no one has heard from him. What has happened to Tyrael and why hasn't hell invaded yet? Blizzard left it at that.
Blizzard did mention, however, that we don't know whether or not Mephisto is coming back. In addition, there are seven lords of hell and it would be wise to count how many we have killed up until this point. All we know is that the game starts in New Tristram, Cain comes back and we'll probably see some old NPCs and a hero or two in the journey.
The art of Diablo has always been very unique focusing on a few key points: stylization over reality, dynamic animations, strong silhouettes, don't be afraid of color, and support the gameplay. To reach these goals for Diablo 3 a few things had to happen. First, Blizzard needed to identify the strengths and weaknesses of the previous styles and condense each down to the core. In doing so, Blizzard realized that the Diablo brand has an emphasis on horror and in doing so they wanted to capture the feeling of the horror genre, yet maintain Blizzard's key design points.
All of these goals are then applied to updating the classic Diablo looks. In doing so, they explore a new visual look using a 3D isometric camera rather than the traditional 2D. This helps the environments come alive. In doing so, Blizzard pays special attention to respecting the overall franchise and the expectations established by the previous games.
Overall, it's important for the art to maintain the traditions but take advantage of new technologies. Blizzard is expecting to use both the art and story to drive Diablo 3, yet also maintain an exciting game for those not quite as interested in the story.