Work has begun on Mass Effect 3
and project lead, Casey Hudson, told PC Zone
that they've got a lot of work cut out for them in terms of tailoring the story in the third game based on your actions of the two.
They won't be re-inventing the third game as they feel they have a great formula established by the second game. I don't envy the developers at BioWare though having to go through all the permutations that one can encounter when playing the past games. I do respect the team for making each game's experience dependent on the past though, which not many games do.
I think the extent of my experience in this area is the transferring of characters from one game to the next when I played Bard's Tale
back in the day.