I was just wondering...does anyone know what happened to the show Inuyasha?  

From what I heard, the series was canceled in Japan. I think they released all the DVD's in the US already. They ended it with no real resolution as to finishing the jewel shard. The movies are always just side stories in the most part. Fans of show show were pretty upset. But I think the story is continuing in the manga, but from what I heard thats almost over as well.

The 28th issue (released on June 11) of Shogakukan's Weekly Shonen Sunday magazine has confirmed that the next issue (on sale on June 18) will feature the final chapter of Rumiko Takahashi's Inuyasha time-traveling fantasy manga. Takahashi has been working on Inuyasha over the course of 11 years and seven months, more than 54 volumes, and 558 magazine installments. Inuyasha will be Takahashi's longest regularly serialized work — topping Urusei Yatsura (over eight years), Maison Ikkoku (seven years), and Ranma 1/2 (over eight years). (One-Pound Gospel, the Mermaid series, and Rumic Theater have all been running for more years, but were all also irregularly serialized and shorter in page count.)
http://www.animenewsnetwo...

So just read the manga and see if the resolve is there.

Here's more information.
http://en.wikipedia.org/wiki/InuYasha

Check out this site: www.InuYashaMovies.net

It gives you all the info you need and all the latest info on InuYasha. You can also watch all the episodes too! >.< ALSO, there is info on the site about them ADDING to the series. The official word has been given that they will continue to make InuYasha episodes, but I'm not sure when that will begin. You'd have to check it out on the site.

Actually, they have released new episodes of Inuyasha. It's called Inuyasha: The Final Act, and it is based on the last few chapters of the manga. Right now there are about sixteen episodes, with about ten or so more to go. It's only subbed for now, but I expect in a year or two, we'll see them dubbed here in the US.

You can find the episodes at Hulu under the animation channel.

And I know this has been a year since this post, but I'm replying just in case it's not known about the new episodes. But it's likely you already do know about them.