It sounds like Carlo Ancelotti's future with Chelsea FC is not yet decided, despite persistant rumours to the contrary. According to the man himself, he's due to have meeting with club ownership to address the question of whether or not he'll be staying at the end of the season.
We will see after the end of the season, maybe the week after end of the season. We have to speak about the future. The behaviour of the club is the same, nothing changed. With a victory or defeat they maintained a good support and they continue to give to me good support.
It’s not crazy to think the club can change, because every club has the possibility to change the manager. The club has to judge my job.
-Carlo Ancelotti. Source: Fulham & Hammersmith Chronicle.
Obviously, Carlo had a hugely disappointing two or three month stretch this season where his team contrived to earn zero points out of a potential three million (I counted by hand, may be plus or minus a few hundred thousand), but overall I think he's been doing fairly well with the team. He has a few failings (who doesn't?), but I think that he's been a highly successful manager, has got us playing lovely attacking football as our default and has conducted himself admirably as an ambassador of Chelsea FC.
All of that said, whether we retain him or not comes down to whether Roman Abramovich wants to keep him and who'd be available to replace him. If Ancelotti wants to go to Roma or something and we can secure an interesting manager, I wouldn't be too upset. Then again, the dude did win us a double in 2009/10 and may well bring us back silverware this season (although that would require something of a miracle). I'm a little torn between the potential sexiness of an Andre Villas Boas and the comfort and stability of Ancelotti, so uh... yeah. I don't know.