Tony, I've got no doubt they have a high MP body in the works but if they really wanted to shake up Canon they would stick it in a less featured body and sell it for the same price as the D700. The 1Ds3 at $8000 ($10,000 in Oz) is most definitely a niche camera for the elite few who can justify it (I never could). Imagine a base model Nikon with a 24MP FF sensor and the 14-24 'kit' lens attached for less than $6,000 and you have landscape photogs dream. I doubt they will do it but who knows after the D700.
As far as the future of the D3 goes I think it will probably drop in price (it seems a little overpriced now that the D700 is out) and still be an excellent seller for the pros who truly want a 'pro' camera. Nikon could possibly discontinue it but if they are selling heaps of D700's & D300's they would be silly not to keep making it since from a manufacturing POV it's essentially a combination of those 2 bodies.
However regardless of what happens, the D700 is a revolutionary body that will change the DSLR industry as we know it. Other manufacturers will be forced to respond and as consumers we will all enjoy the benefits.