S4 was originally planned, but it now seems like S3 will probably be the last release - although if the devs make somethign like the "Rally Pack" and charge £24 for it i'll quite happily pay!
I think what Scawen was getting at, like my previous comment, is that S3 might not come in the same form as S1 and S2 have, rather than the devs retiring once S2 if finished.
Well based on current rates of progress, I'm not that sure that continuing the current development strategy is going to work all the way up to S3. If you think that S1 took a couple of years, S2 has taken 4 years so far, then S3 might take 6 or even 8 years, depending on whether you subscribe to a linear or exponential view of things .
Mind you Geoff Crammond got away with releasing a barely changed Grand Prix game full of 10 year old assembly code once every 4 years, so maybe it'll be okay. And Scawen seemed to have kicked Geoffs ass in many departments, so I have confidence (although... GP3 did have undertrays that worked properly, wet weather and 4 way dampers, so he hasnt been surpassed in all regards).
I don't pretend I have all the answers as a lot has not been officially been confirmed by the devs. But an S4 was originally planned but it was brought down to 3 stages.
Originally I believe every stage was intended to be completed in 3 months, meaning the entire LFS series would have been completed in a year. As we all know that took a bit (just a bit ) longer. Reasons for this (I think) would be a too optimistic view by the devs AND simply because the devs have raised their standards.
As Bob pointed out there may not even be an S3 the way it was planned, but several smaller releases. Scawen hinted at that before but nobody (maybe not even Scawen himself) knows how it's going to turn out.
But I think we can be sure that there isn't going to be an S4. Unless Leo will continue his dad's work when he's retired