There has been an update on the official Giana’s Return webpage. Here is the quote:

No worries… we are still alive! But now the bad news… Just a short note that the project is on break till around September 2004. The game is just on a break and there will be a final, the project is NOT cancelled. But now the better news… Our musician Alex is going to re-touch a few songs and makes them ready for the Soundtrack-CD which will be avaliable with the EXTENDED SPECIAL DREAMCAST VERSION of the game which will have Chris Huelsbeck’s original Ingame/Titlemusic. If there is enough interest, we can get in touch with Manfred Trenz to get permission to re-made the classic leveles and release them as kind of bonus. Please vote at the webboard for this so we can get an overview and know if the additional work is it worth.