Personally, if he is enjoying it, and is achiving what he and the team wants, why wouldnt he continue. And i also feel Mercedes are wanting his replacement to have at least 3 seasons experience in F1 before they have a replacement that can step in. I think there is a reason that Mercedes have put Di Resta in the Force India, and have applied some back room pressure at Force India for Hulkenberg to get a seat.
There is one way they could replace Schumacher, and i think, looking at the contracts situation, and i think depending on his performance in relation to Vettel, Webber could be in a bidding war between Mercedes and Ferrari as Ferrari will replace Massa next season going on his 2011 performance, but again this depends on his 2012 performance at Ferrari.
I think 2012 will be year of drivers trying to out perform their team mates and each other. It could be a year where drivers have more do-or-die just to prove they are faster, better, tougher to get into a top 5 team for the young guys. The older guys will all be steady eddies, plodding away, getting the sure results they need, and could ultimatly be the ones the larger teams look toward.