I believe Fox was considering offering them a two season pick-up (which they did do for "24") which would have kept the costs down vs. renewing again for the following season. This would also have gotten them up to around 84 episodes which would be enough for a syndication deal. They probably decided it was too risky, and will reserve the right to cancel the show next Spring.
Wow, I was worried about loosing yet another great show to mindless reality shows. This is great news. I cant wait for season 2 to make it to dvd. I just bought season 1 (at the time, my girlfriend and I only saw season 2, but loved it) and it really is one of the best shows on television.