Supposedly there were scheduling conflicts and Catherine Hardwicke wanted more time to prepare and she didnt feel that she could do the sequel justice by the Nov 20th set release date for next year so she turned it down.....or so that was the story released in press anyway.
Perhaps she was booted because so many fans did not understand her style of directing for Twilight having kicked up a huge stink about it (personally I think if anyone is to blame its the screenwriter and not the director). I loved what Catherine did with Twilight.
I really believe Summit did not want her to do the sequel after all the fan feedback and now they realise they are sitting on a goldmine with this franchise and have opted for a more commercial friendly director (Chris Weinz) who will appease the masses with his knowledge of special effects (Golden Compass) and sweet style of romance (American Pie).
Although I adored his film 'About a Boy' which is the only thing that is giving me hope he could possibly bring some life to NEW MOON. hmmmmmmm...

Yeah I heard that too. I heard that Summit wanted to get the next movie (New Moon) out as soon as possible because they didnt want the Twilight fans to die out with the long wait, a bit like Harry Potter. So some people are saying that she got fired because she wanted to wait.