The NY Times has an article on the recent discovery of a jawbone and note that the original researchers are going in a different direction with the ancestry question:
In an exchange of e-mail messages from Australia, Dr. Brown said, "The limb proportions, stature, brain size and skeletal robusticity of H. floresiensis replicated those in Australopithecus afarensis, not in any member of our genus Homo."
Dr. Brown said he was preparing to publish results of research that could explain what, if any, connection the little people had to Lucy.
The other researchers seem to be concentrating less on the microcephaly hypothesis and more on island dwarfing.
John Hawks has more commentary here on the Australopithecine idea, and another link to a story from ABC Australia on research supposedly showing that the LB1 skull is closer to a microcephalic than than an early human. So, stay tuned.