He's not doing the TDF this year; he's continuing to ride, but he may never be back to full form. A few years ago, Joseba Beloki shattered his hip in a horrific crash that could have easily claimed Armstrong as well - Beloki was a top contender, but is at best a B-list pro now.
I think he also agreed to a deal with TdF not to ride the tour this year in exchange for race officials deferring their decision on stripping his title until after the USADA hearing on his case (in May IIRC?).