IESB.net can be quoted in saying that Dakota "...confirmed that she is in talks for the role and then we should have an official announcement soon."
Before I go on to talk more about Dakota, let's discuss Jane.
Jane is a name that, to any sane vampire, inspires fear within their still hearts. She is a guard of the Volturi's who posseses the power to psychologically torture anybody she wants. Well, not anybody. In New Moon, we find out that whatever blocks Edward from reading Bella's mind also prevents Bella from feeling any pain by Jane's gift. (Of course, we all know now why that is, but at the time it was kind of spooky.)
We find out that Jane is angry and bitter, though any human would think her too young to be. This relates to her past. The Volturi (being as old as they are) had been keeping an eye on Jane and her twin brother, Alec, hoping to change them when they were older. However, their plans were altered when Alec and Jane were taken by the locals and burned at the stake, and they were forced to change the twins then and there.
In New Moon, Jane is present for only twenty minutes, but it's a huge role in itself. It's definitely one that is specific, and people are really worried if Dakota can pull it off.
The questioning mostly stems from her appearance. Remember what Dakota looks like?
She's pretty adorable. I'll admit, the girl used to creep me the hell out. She's grown into her eyes, though, and so now I can watch her without cringing. But can she fit the part of Jane?
Jane is described as "very tiny". According to IMDB, Dakota Fanning it 5'2". That's REALLY short. Her hair is "lank, pale brown" and "trimmed short". This is what most have been skeptical about. "OMG, she has BLOND hair! JANE HAS BROWN!" Need I remind everyone that there's this lovely invention called hair dye? Nikki (Rosalie) and Peter (Carlisle) have naturally DARK hair. Kellan (Emmett) has lighter hair. They all had to DYE their hair for their parts. Jane is further described as a "rather slim and androgynous figure with a face too pretty for a boy". Dakota is only fifteen. She's got a very feminine face, but I think she could pull off being androgynous well. Dakota ISN'T as young as I managed (which would be about 12), but she still appears more youthful than she really is. And lastly, Jane is said to have "wide-eyes, full-lips and a child-like voice". Dakota doesn' have the 'full-lips' I'd imagined (think Emily Browning), but have you seen this girl's EYES? HOLY CRAP! And her voice could probably pull off being childish.
But there is one concern that I have to mildly agree with: Dakota Fanning is a bit too well-known. In Twilight, they did a good job of casting people who weren't big names. Out of all the cast, Kristen Stewart was probably the most recognized. And really, it was good that way. It made the movie feel fresh.
To be fair, Dakota has been in a lot, but she hasn't been in the news. I don't think she's as 'famous' as everyone makes her out to be. Of course, I haven't actually watched her in a live-action movie since Uptown Girls. I could just be biased.
Either way, I think Dakota would fit in nicely with the rest of the cast. Most people were skeptical (aka OUTRAGED) at the originaly list for Twilight, but most of us have grown to love them. I'm sure the same thing will happen with Dakota if she's given the part of Jane. Give her a chance and she'll probably fulfill your expectations better than you'd thought.