I heard she will finish it, but she just didn't say when..
http://stepheniemeyer.com/midnightsun.html
(Maybe I just don't understand everything..)
Edit:
"So where does this leave Midnight Sun? My first feeling was that there was no way to continue. Writing isn't like math; in math, two plus two always equals four no matter what your mood is like. With writing, the way you feel changes everything. If I tried to write Midnight Sun now, in my current frame of mind, James would probably win and all the Cullens would die, which wouldn't dovetail too well with the original story. In any case, I feel too sad about what has happened to continue working on Midnight Sun, and so it is on hold indefinitely."