Hothead had a panel at GDC today, where they mentioned Deathspank. Surprisingly, the game is not episodic, but will probably have DLC later on. Also worth mentioning is the fact that Ron brought-in his own game engine, an "updated version of SCUMM". Interesting, to say the least. I wonder what caused them to change their minds about it being episodic. Possible suspect: Mixnmojo.
Update: Ron blogs about it:
"DeathSpank isn't a very patient guy. He would never be able to play though one episode after another. He'd just run in and play them all at once. He's that kind of guy. He also gets impatient if someone doesn't die fast enough.
So what we did was take all the story, puzzles and fight'n and weave them into one larger game. The overarching story is the same, but the world is larger, more open, more compelling and completely load-less. You can walk from one end of the vast world to the other and never see a load screen or camera cut."
Random thoughts: is it just me, or does Deathspank seem designed to be sequel-less (i.e.: we're already being told the whole story)? And does this re-shaping of the game mean it will get delayed?