OK so we know there is a new novel Al is writing called "The Return" does this indicate Remedy is going to make a sequel?

Im just trying to figure out where american nightmare fits in..

Well, nothing is confirmed 100% yet but I personally think Remedy will do Alan Wake 2:

http://www.relyonhorror.com/latest-news/more-details-about-alan-wakes-american-nightmare/

American Nightmare is more a sub plot not a successor. On the game play side it is slightly different and focusses on action.

Go and read the Alan Wake Files book now ;)

There's been an interview with Remedy's franchise manager or something who also commented on the GOG release. He made it quite clear that American Nightmare is not the end of Alan Wake's adventures. To me this definitely sounded like confirmation that there's gonna be an actual Alan Wake 2, despite all those reports that made it seem that Alan Wake wasn't successful enough to spawn a sequel (I'm wondering if we owe this to the success of the PC release).

Its an amazing game and i completely enjoyed it. I would defiantly be interested in another one. from GOG.com of course :)