The next to final torch bearere will stand on a platform in the the middle of the stadium and Princess Diana, John Lennon, Elvis Presley will rise from the stage to carry the torch to the top of the stadium. A UFO will appear and deliver the cauldron(yeah right!!). I think the cauldron will be either
1. Inside the stadium(possibly above)
2. On top of the orbit tower(why would they be just have it stand there?)
3. Another location in the city(London Bridge, Millienium Wheel, Hyde Park, Big Ben,)
Like others have mentioned they maybe plannng something we have never seen before. Though I doubt they would use a "virtual cauldron" or have cauldron at all. It will be interesting see what they have in mind.