Having turned in his first draft of The Wise Man's Fear last year (itself a massive reworking of the original manuscript of all three books that got Rothfuss his publisher), Pat Rothfuss has confirmed that his second draft has been turned in. I have to say that 'draft' is a bit of a misnomer here. Based on his comments, the book has been pretty heavily rewritten and re-edited with changes to the structure of the book and new material added.
As Rothfuss states, this isn't the final draft of the book, nor does it mean a publication date will be forthcoming imminently. It is, however a big step in the right direction. I suspect that this news does mean that the book will be a 2011 release rather than a 2o10 one, however.