It would be pretty awesome if it eventually did release, although I highly doubt it would be any good. But to answer your question... no. Not a chance. With Gamespot's last update on this game being from Jan. 08, I'm taking the assumption that it was quietly canceled when Eidos was gobbled up by Square.
I can only hope. Duke Nukem Forever managed to get bought out and closer to being finished. Aliens: Colonial Marines is supposedly still coming along. Hopefully Highlander can go gold and get some press in the next year or two.
Supposedly there is a reboot of Highlander the movie in the works, although like this game it may never happen. It is an interesting premise for a game though...although games based on movies/TV shows/comic books rarely turn heads.