Apparently Human Head isn't working on the game anymore. The delay is a result of Bethesda hiring a different developer to basically overhaul the game, so don't expect the past E3 demos to be indicative of the final game.
It's pretty surprising that Bethesda would do such a thing when you consider how shoddy most of their third-party games are. Rogue Warrior, anyone? And then you look at how buggy their first-party games are (Oblivion, Fallout 3, Skyrim) and that casts even greater doubt upon their quality standards. I'm thinking this situation has more to do with politics and less to do with quality control.