As far as I know, that system is dead. The Landwarrior system has moved beyond that design and has elected to retain the M-4 if I'm not mistaken. I know the XM-8 was tested in Iraq in this past war, which derived from the OICW.
Read that as well - The Army will be all M-4 by 2009. Apparently the only time a soldier will not have an M-4 will be in Basic Training.
I'm guessing the Marine Corps will not be far behind. After all , I think all an infantryman is supposed to do is engage targets out to 300 meters.
The Marine Corp and Army both field Squad Designated Marksmen with full sized accurized Semi-Auto only AR's - and the ARmy is deploying a new Sniper System rifle in 7.62mm based on the Knight's AR varient (very sweet looking!)
Again, I bet the Marine Corps will give up ob the whole bolt-action sniper rifle for the same thing...
Thoughts anyone?