I talked with some people about the status of this release, and I have some information.
Yes, sadly the release of this book has been delayed. Note, I said it is "delayed" - it has not (I repeat, it has NOT) been canceled. While I couldn't get a single solid answer from anyone as to why the change occurred (they were probably several factors involved), a few insiders gave me their insights as to why this release might have been postponed:
1) This book will be a higher-price collectible item aimed mainly at harder-core fans, and it was originally planned to come out at the same time another higher-price collectible item (the season 4 DVD set) would be hitting store shelves. HIT/Henson may not have wanted to release two big Fraggle items at the same time that would basically be competing for the fans' money. While some fans may have gotten both items as soon as they came out, many wouldn't be able to get both right away and thus the fanbase's purchases would be split between the book and the DVD items and thus the initial sales of both items would suffer.
2) Like the MindStyle action figures, they may have choosen to save this book to be part of the bigger Fraggle Rock renaissance planned for 2009/2010 (along with the release of the movie)
3) The publisher and producers might just need more time to put together this book.
It is coming, just not as soon as originally announced. I will let you know as soon as it is back on the schedule or anything changes.