Well there most likely isn't much done as of yet since it's a long way away it's unlikely animation has started. I understand Toy Story 3 has only just started recently, so Cars 2 not for a while. There will be a story ready.
Cars 2 is for summer 2011 in case anyones interested.
Disney wanted to start a Toy Story direct-to-video line, but Toy Story was just too good to waste

I hope this can be replicated again with Cars.
I would be concerned about sequels to any of those films though. The bar is so high (in my opinion), the ending to Monsters, Inc. is perfect and the others are too brilliant. And these three would only happen with the original directers involved, and Stanton (Nemo) and Bird (Incredibles) are both busy on other projects.
Also Cars probably has a special place in Lasseters heart, and he is willing to hand over the reins of Toy Story and Cars to someone else now that he doesn't direct anymore.
You'd be right. I think Toy Story was released in the US during Winter 95 and then the UK early 96. Thats where this kind of confusion comes from.