I for one am excited about the possibility of The Rock being in the latest Terminator movie.
As for the plot, we have to remember that Arnold's no spring chicken anymore. They're gonna have to come up with a plot to make use of his now flabby muscles. One idea listed earlier is he is an older model terminator which has been in action for the past twenty years and the living tissue which covers his metal endoskeleton has aged just like a normal human's would. In this case The Rock could be a newer model of Terminator just off the assembly line. Maybe after the failure of the T1000, Skynet reverts to the tried and true method of living tissue over metal endoskeleton, only the metal endoskeleton is stronger, faster, and more durable, and looks like The Rock. This would be a story line which requires no time travel.
The other possible story is that a Terminator (most likely played by The Rock) goes back in time to the 1950's to kill Sarah Connor's parents before she was even born. In this scenario, Arnold either plays her dad, or a close family friend whom they run to when this unstoppable killer negro (how The Rock would likely be seen as during the 50's) shows up and tries to kill them. Obviously, this one WOULD require time travel.
But there's only so much you can do with this franchise. You can either have it take place in the future during the war. Or you can incorperate time travel and have it take place in the past/present.
Personally, I'd kind of like to see a movie where the human resistance finally defeats the machines. When they storm Skynet Central, they discover the time machine and see that a T-800 had already been sent back in time. Then Kyle Reese volunteers to go back in time to try and stop the terminator. Then the time machine is destroyed and the whole thing starts all over again.