yeah, Nobuo really quit, but stated that he would continue to work with square from time to time as a freelance.
I think Nobuo is a great composer and did a terrific job with all the FF's he's made the music for, but I also really like the work of others like Masaharu Iwata, Hitoshi Sakimoto, Kumi Tanioka or Hidenori Iwasaki... they all have different styles. I don't think it would be such a bad thing to have some of them work together, and each making music for specific parts of the game, music that would translate the mood of the scene (for example, I think Iwata and Sakimoto have a more epic style, while Nobuo usually makes mellower tunes)