Astonishing that a sequel to Labyrinth was even discussed that recently. (Maybe they've been reading our posts!) But I wish we had more information than just the title. How does this relate to Labyrinth at all, or does it not relate anymore?
The direct-to-video thing does sound like a strange route for the film. We'll have to see when it comes out, I guess.
Rather than direct-to-video, it would be nice to complete the big-screen "trilogy," the way Baz Luhrmann has his "Red Curtain Trilogy" of unrelated stories that nonetheless have a distinctive style -- Strictly Ballroom, Romeo + Juliet, and Moulin Rouge. How 'bout a "Jim Henson Fantasy Trilogy" of Dark Crystal (directed by Jim and Frank), Labyrinth (directed by Jim) and the "Mirror" movie (directed by Brian)?