I had heard rumors that the local would be London more than anywhere else but a few years ago, Rockstar acquired the copyright to the name of several locations (with Tokyo being one of those). I was honestly hoping for Tokyo. Regardless, I was a huge fan of GTA3 and loved the look and feel of Liberty City even in the port of Liberty City Stories. I must now get my hands on a PS3, though, as I am used to the controls of the Playstation systems anyways. Looks like it will be fun... I also heard that it would be Liberty State as well.
Cade