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No specifics have been revealed about the storyline and the placement in the timeline, though judging by the graphical style, it may have some relation to The Wind Waker.
Gameplay
The gameplay is mostly overhead, similar to classic Zelda titles, but the character models and also all the environments are in 3D. The rendering environment is pretty similar to Animal Crossing for the Nintendo Gamecube, and is somewhat like the Nintendo DS version.
The lower touch screen will be the main gameplay area, including such gameplay features as control of the boomerang with the stylus or drawing shapes to complete puzzles (such as the hourglass shape at the beginning of the trailer shown at GDC), while the upper screen will mostly be used as a map screen. The map also appears to be able to be brought down to the bottom screen, so that the player can write notes on it.
The top screen will also be used to create a taller screen in some events, such as the battle seen in the trailer.
Link will have a fairy once more, similar to Navi and Tatl from The Legend of Zelda: Ocarina of Time and Legend of Zelda: Majora's Mask, respectively. It also appears that the fairy acts as the cursor for touch screen input with the stylus, as the trailer shows the fairy directing Link, and moving and approaching enemies ahead of Link.
Sailing similar to the system in The Legend of Zelda: Wind Waker is also present. Instead of a sail boat, however, a steam boat is Link's mode of transportation. The boat's course is plotted using the touchscreen, letting the player concentrate on attacking foes.
