From what I've heard, the show's season order was cut from 22 episodes (normal for a sitcom) to 13, but it has not officially been cancelled. Of course, it doesn't look good. Although a similar situation happened last season when they cut the episodes from 22 to 18. I'm guessing the show is done, which is a shame. Rumors are flying that the show is being shopped to other networks. Ideally, they'd like to see it end up on HBO, but apparently the show is too expensive. It has a large cast with higher-than-normal salaries. NBC is a possibility. Pick up AD and bring back Scrubs. Move Earl to Thursdays and it would be "Must See T.V." all over again.
I love this show and watch the first 2 season DVD collections over and over. Upon repeated viewing, I can now say this is one of my five favorite sitcoms of all time. My guess is the show is too smart for the masses. They just don't "get it". Jokes are too fast and the show does require a certain familiarity with its history in order to truly "get" all of its gags. I actually don't know that many people that actually watch the show.
It is sad that a show this smart can't make it and other drek like The War At Home and Freddie get picked up for the entire season. FOX shouldn't have moved into the sitcom graveyard that is Monday night and paired it up with a new show. I don't think FOX knows how to market the show. It wins all sorts of critic awards, but they didn't capitalize on it.