I do not know how reliable this is, but it is rumoured in media circles tonight that Buckingham Palace has indicated that there will be a title announcement tomorrow morning. Traditionally a British prince is given a peerage on the morning of his wedding, like Prince Edward was created Earl of Wessex in 1999 and Prince Andrew Duke of York in 1986.
It has earlier been claimed by some journalists that Prince William has indicated that he does not want to receive any other title than the one he already has, in which case his wife will be officially styled as HRH Princess William of Wales - unless Queen Elizabeth II should allow her to be styled Princess Catherine although not a princess in her own right, which is less likely.
If a new title is forthcoming tomorrow it is most likely a dukedom. Prince Edward is so far the only one who only received an earldom, although it was officially stated at the time that he will become the new Duke of Edinburgh following the deaths of his parents.
Among those dukedoms which have been most frequently mentioned in speculations are Cambridge and Clarence. The latter has some unfortunate associations which might perhaps speak against it, while Cambridge is said to have been the dukedom intended for Prince Edward - there is a story that he changed his mind and asked for the title Earl of Wessex after having watched the film Shakespeare in Love.
Personally I would cast a vote for a Scottish dukedom. Some have suggested St Andrews after the university which Prince William and Kate Middleton both attended, but it should be noted that there is no tradition for granting dukedoms based on personal connections. There is also a problem in that one of the subsidary titles of the Duke of Kent is Earl of St Andrews, a title which is used by his eldest son, but on the other hand there are several examples of multiple peerages with the same name (for instance there are both a Duke of Sutherland and a Countess of Sutherland). But there are also several other places in Scotland which could make suitable dukedoms - perhaps even quite simply Duke of Glasgow, which I think is a title which has never before been used.
After all but ninety hereditary peers were removed from the House of Lords in 1999 it might be argued that creating new dukedoms does not make much sense. One might also argue that Prince William needs no new title as he will nevertheless one day inherit a drove of titles. Indeed he will become Duke of Cornwall the second his grandmother dies and his father succeeds to the throne and is likely to be created Prince of Wales shortly thereafter, but this might yet be quite some years into the future. In any case a peerage held by Prince William will merge with the crown upon his own accession to the throne.
There are at least three previous examples of the eldest grandson of the monarch being granted a dukedom. The future George III was created Duke of Edinburgh by his grandfather George II, Prince Albert Victor was created Duke of Clarence and Avondale by his grandmother Queen Victoria, and following Albert Victor’s death his younger brother George (V) was created Duke of York.