I've played TT on the PS2, and loved it. Every one of the 135 motorbikes had a fully detailed interior with functional gauges! It was the first GT-Based title (unofficially, as it was a spin-off game based off GT4) to feature all premiums, and that was on the PS2! Physics were also quite impressive for a game designed by developers who normally made games with only cars. Bikes lean, fall, wheelie, and endo (front wheelies while braking) just as you would expect when riding a motorcycle. It had a few minor flaws, but in all it was as solid motorcycle racing game.
According to Wikipedia, likely around the time when GT6 was still in progress, Kaz did say during an interview that he would like to make a sequel to Tourist Trophy, but with the constant updates for GT titles, a sequel to Tourist Trophy would be very time-consuming. Though even with this issue, PD is still considering creating a sequel to TT. Source link:
http://en.wikipedia.org/wiki/Tourist_Trophy_(video_game)
On the lighter side, proof of the progress with HD-quality bikes on the PS3 were seen in GTHD (Image example on Minna92's post), as 3 of the bikes from TT (Honda's CBR1000 RR, Yamaha's YZF-R1 RM, and Suzuki's Skywave 250SS) were in the preview game made before GT5P. From the bikes seen in GTHD, it's likely that PD is slowly working on bits of TT2 but it's only between releases and/or on their free time.
I am guessing it'll likely become a PS4 title released between GT7 and GT8. I just hope it happens, and if the TT2 project ends up becoming cancelled midway through the build, they should at least mix a good portion of the bikes seen in TT into the GT games as part of a special "Tourist Trophy" DLC pack that includes the Isle of Mann TT course (if track isn't in GT7 upon release).