Maybe because all the cast has left....

It could be budgetary reasons. Al and Miles said that they left because of the budget. It makes me wonder how small the budget is. Keep in mind with the horrible decline of the US dollar, it is now more expensive to shoot in Vancouver than the US. So maybe the writers, in effort to save on the quality of the show, felt they could consolidate their ideas into half a season. It would make the season episode count smaller, but the visual effects wouldn't suck; they'd be better than ever.

I don't understand how the budget can be that small though. The WB and UPN merged. Theoretically, wouldn't their budgets be doubled? Instead the budget is smaller. Freaking UPN - I blame their management.

very nervous..although I don't want to be. Too many things don't seem to be going the right way for next season. I hope I am proved 100% wrong and I love season 8, I am reserving judgment.

I don't think there's a need to worry now. I've seen on several websites that at the upfronts yesterday, Smallville's season was commented on. The mid-season Reaper comment meant that when Smallville takes its usual mid-season break in November/December, Reaper will start with new episodes. However, once Smallville's break is over, Reaper will go away or move, and Smallville will be back as usual. So Smallville will have a full season.

What bothers me more is the absence of Allison Mack's name from next season's cast list. However, Laura Vandervoort was also omitted, which is perplexing. It's my theory that the CW doesn't have a clue what's happening.

I'm glad that they're treating Smallville right, but if they want to get a stable fan base for Reaper they need to keep it on at one night at one time, it's too good of a show for people to miss because they don't know when it's going to be on next.

Sadly our favorite show is on a channel where chaos and frantic planning is the norm and they are underbudgeted and kind of in the dark of a lot of their own doings, so for me I'm just gonna wait and see

Allison was left off as a contingency plan since they still don't know about her involvement. The same goes for Vandervoort, she is still not signed on for any episodes in season 8.
And yes the mid season break (on or after the episode 9 mark) will be when Reaper pops up more than likely.