This is a new house, there is a family that has a high tech security system that watches several rooms in the house: Kids room with the baby and dog that we seen from the trailer, kitchen, parent's bedroom, patio/backyard, and basement. This is how the audience will view the movie instead of one camcorder being used.
The parents are unknowing of whats going on. Only the dog interacts with the ghost throughout most of the film.
Katie might be the apparation we see in the film. Something about transfering the demon in Katie into the baby seems very plausible. The mirror is used as a paralllel transport in which the camera will see the baby being transfered between both worlds. From the trailer theres a creepy lady, some kids, what looks like Katie puppeteering the infant and some sort of ritual. It doesn't add up much now but I'm guessing that the baby's name is Hunter and that he will be a big part of the finale.
On The Lookout 4: some new music. WTF is going on this year?