Ian McDiarmid is reportedly set to return to the Star Wars franchise for Episode VII.
Jedi News reports that an unnamed source told them the actor, who played Palpatine in the first two trilogies, has signed on for a part in the upcoming movie, though it's unclear what the role would be.
Minor speculation follows about what the role could be, so if you've yet to see any of the Star Wars movies you should head off to avoid spoilers. And watch them. Obviously.
Considering Palpatine is pretty much his signature role, it'd be odd if he appeared as another character. While a cameo is possible, it's far more likely that Palpatine could appear as a Force Ghost or in flashbacks seeing as he died at the end of Episode VI. There's also the possibility that he's been cloned, or it could be tied into the ability to attain immortality using the force that he supposedly learnt from his old Master before killing him.
Regardless, until we hear anything solid from Lucasfilm this is nothing more than a rumour. With filming due to start next year for a 2015 release, we should hear something before too long though.