I also still like the idea of it being at the top of the Orbit - to me the Orbit would really make sense as part of the Olympic Park if that were the case and it would secure its legacy moving forward. But Heatherwick designing the cauldron makes me think it sadly won't happen - I don't think they would stick his cauldron on top of the Orbit.
I think it would be a really nice way to light the flame as well, take it around the stadium - then back out again with all the viewers wondering where its going, then see it cross over to the Orbit and run up the spiral staircase with it, fireworks coming out of the stairs as they go up, then light it from inside the viewing gallery.
One thing that hasn't really been touched on is what emotive thread they might use in the lighting of the cauldron, if any. In Barcelona it was lit by a paralympic competitior, in Atlanta Mohammed Ali. In Athens the emotion was in seeing the games coming home to Greece and in Beijing I suppose it was the significance of the moment of China's emergence and acceptance on the World stage. I personally really liked Sydney, all women carrying the torch into the stadium, passing it on to Cathy Freeman (of aboriginal decent) and standing in a line cheering her on as she rose the steps to light the cauldron.
Unfortunately I don't know where it is now, but I saw an interview with one of the producers of the ceremonies (probably in this thread somewhere) and she said she was confident London's would be the most emotional and best of them all. I'd quite like it to be lit by someone like Martine Wiltshire - was on a tube train on 7/7, reading the paper about the Olympics coming to London and was involved in one of the bombings. She lost both legs and has since trained hard and secured a place in Team GB at the Paralympics. It's a very inspirational story.