Why Skyward Sword is doing everything right

Just like the Dark World/Light World system in The Legend of Zelda: A Link to the Past, Skyward Sword also takes place in 2 separate worlds.

The Sky

The sky world is just like the sea in Wind Waker, in that it's a huge free roaming area with many islands. Instead of a boat or a horse, you travel by bird. The sky world is a heavenly realm that some speculate to be the Sacred Realm, the resting place of the Triforce. That could be the case...

The Underworld

Link lives in the sky world, and is completely unaware of there being another world below the clouds... until the Skyward Sword calls to him to fulfill the hero's destiny... The underworld is the what later becomes known as Hyrule, but in SS it is not yet united as a country, and instead it is a dark world ruled by evil forces.

Metroid-style game flow

In contrast to the free roaming sky world, the underworld is puzzle/maze-filled world that opens up as you gain more items and abilities, in the same vein as a Metroid game. The usual dungeon->field->dungeon flow of traditional Zelda games is done away with. Instead, the underworld is more like a single continuous dungeon. The "main" dungeons of the game are simply different subsections of the underworld dungeon. There will be action/puzzle elements all over the place, and some areas will require items you don't have yet and you will have to backtrack to later on, while other areas you won't be able to use certain items (I hear there's even a part where Link loses his sword).

Items are Upgradable

Something that pissed a lot of people off about Twilight Princess was that the game was filled with countless hidden chests that rewarded you with... rupees. There was hardly any incentive to explore and find everything the game had to offer because rupees became useless so quickly. Another complaint was that every new item you got was only ever used in the one dungeon you got it in, and you never had to use it again.

Skyward Sword combats these issues by having upgrades to find that change your items' effects. Now the many hidden chests you find will likely contain something that makes you glad you went out of your way to find it. If your items are being upgraded throughout the game, it's likely that you'll keep using them and they won't just become useless like many of TP's items were.

The Villain isn't Ganondorf

Finally some new and original plot development! Ghirahim may or may not be the final villain in the game, but I definitely think it's likely that he is one of the interloper villains that was mentioned in TP's backstory (From this cutscene).

His appearance kinda reminds me of Vaati, the villain in Minish Cap...or kind of a white Shadow Link.

He has some pretty cool villain dialogue, a refreshing change from Ganon's usual serious business dialogue.

While not 100% sure, it's very unlikely that Ganon will be seen in this game at all, as it's supposed to take place many generations before OoT. Unless there's some ridiculous time-travel shenanigans going on, Ganon won't be in Skyward Sword.

Zelda is in the game, with a new appearance

As we all know, Skyward Sword takes place before the unification of Hyrule, and before the royal bloodline of Princess Zeldas began. The Zelda in this game is not a princess, but instead is just a regular sky-dweller, and close friend of Link. She gets kidnapped by the monsters in the underworld, and Link goes to save her. It's likely that this Zelda will stay in the underworld to form the kingdom of Hyrule later on, but nothing is known about that yet.

The original Seven Sages are in the game

First, with this game being about the origin of the Master Sword, which was said to have been used by the sages to seal the Sacred Realm, and now with a character who looks an awful lot like Rauru, the sage of Light, it's obvious that at least some of the seven sages will appear and play an important role in SS's plot.

Link gets an athletic upgrade

In Zelda games prior to this, Link could only move forward at a constant pace, roll, and climb up special "climbable" walls. SS features a more agile Link allowing for more fast-paced, action packed adventure with a more athletic movement set. Link can sprint at full speed, jump up ledges (without having to wait on that painfully slow climbing animation), and he even has a stamina bar that goes down as you perform certain actions.

There's also a shield meter, that depletes as you block attacks. I guess your shield will break if it goes all the way down...

The Sword Beam returns

You can charge up your sword by holding the Wii remote up in the air to charge your sword up, and at full charge it shoots an energy beam! Just like the classic Zelda. Expecting to charge your sword to do a spin attack? Not anymore, now the spin attack is done by swinging both the Wii remote and nunchuck at the same time. I can't say much about the controls as I haven't played it, but from what I've read it's about 1000x more natural and intuitive than the Wii TP's controls.

These are mostly confirmed facts from the stuff revealed at E3 2011, with some of my own speculation added. Here's some more info about Skyward Sword:

http://www.zeldauniverse.net/forums/future-zelda/120264-skyward-sword-faq-general-discussion-v-4-cometh.html
http://www.zeldawiki.org/The_Legend_of_Zelda:_Skyward_Sword

Here's a gameplay video showing Link's (first of many?) battle with Ghirahim:



Dungeon gameplay:





Flying through the sky world: