This month's game informer has a decent writeup on it.. to summarize:
Boon was not involved with any of the previous side-games and is overseeing this one.
The opening movie will cover the story from the end of MK1 up to MK3.
They are taking all the environments and charactres from MK3 for the game.
Gameplay was compared to EA's LOTR games and Demon Stone.
1p is Liu Kang, 2p is Kung Lao.
Each attack has 4 animations front back, each side so the same attack and be transitioned to any nearby opponent.
Four attack buttons, Fast, Medium, Hard and Throw.
Has lock on button, and still perform attack to enemy behind while locked on other character.
Bodies can be used to pull down ceiling spikes, to create a temp platform on a spiked wall so you can jump up to a higher level, etc.
Many secret areas in the game(decent amount of platforming), some areas only available when played cooperatively.
All secrets from MK2(Santa Claus?) are in Shaolin Monks.
Some good details on different stages and multi-fight boss fights that I'm too lazy to type.
All the MK1 or 2 people are bosses.
30% of the game isn't part of the main storyline(optional stuff, ie. Ermac sequence, if you want to play through game as Sub-Zero you have to beat Ermac, lots of unlockable stuff).
You fight alongside character as well(the example they use is an AI control Cage using all MK1 moves).
Must gain experience to be able to purchase additional moves, dieing enemies refer your meter slightly.. but only enemies you kill, not enemies you defeat by leading them into the various environmental deaths.
example of upgrades... Liu: you start with one fireball, you can go to two, then three, then throwing them in the air. Kung: throw hat, then bounce off walls, then kill everything around you.
Some moves only available via secrets in various levels.
There are fatalities in the game.
Current plan is 10 fatalities for each of the two heroes, plus one for each of the hidden characters, and five team fatalities.
Combo's and defeating foes builds up fatality meter, level one allows you to do a fatality on one enemy, level 2 more than one foe, level 3 undecided. One idea is Brutality 15 secs where all heavy attacks are one hit kills.
Weapons in the game as well.
Versus mode.
In two player mode share health bar.
12-15 hours.
Lots of screens in the writeup... my interest is piqued.