Jedi News
Information passed to Team Jedi News via an unnamed source has informed us that Ian McDiarmid is set to return to the galaxy far, far away for a part in Episode VII.
The specifics of the role are unclear, but it seems likely that McDiarmid will be returning to his signature role of Palpatine. Whether as the original or a clone of, we are yet to discern.
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I don't think I'd be overly happy to see him back in any form aside from a possible flashback or perhaps as a spiritual driving force for say, an unknown apprentice much like Obi Wan was for Luke.
I really hope they don't go with the clone Palpatine. That just seems like it'd belittle the sacrifice Darth Vader made in Return of the Jedi. It'd be hard to watch the film without thinking about his return, significantly lessening the impact of that moment.
Palpatine had figured out how, to become immortal, having luke also join the dark side would be vital in the last trilogy.
Pretty much what everyone else has said. If he returns as Palpatine, he should be a spirit or in a flashback. This pretty much goes for most characters in previous Star Wars movies.