will there be an update for pagesetter when mediashare reaches production level?
Yes.
will mediashare be downwards compatible with photoshare's way to generate urls?
No. The URL's are very different. Please check "Security" in Mediashare's readme.txt file.
we are afraid of getting thousands of deadlink when mediashare does not unterstand the "old" photosahre url syntax. sure, we can use redirections serverside, but the possibilities with regex are limited.
That is very understandable. But both programs can live side by side. So why not just remove edit access to Photoshare and keep it as it is? That's what I plan to do on my own sites.
The Photoshare conversion might also be able to generate a conversion database of some kind so that old Photoshare links can be redirected to Mediashare. I'll think about that.