Stones camp has denied Charlie quit.  the rumor is they're going to put out a new album in 2010 and tour after.  What I'd heard after the last tour was that he did not want to tour again in the big fashion they are accustomed to.  If anything, they were going to scale it WAY down.

Charlie Watts Quits The Rolling Stones
by Paul Cashmere - September 2 2009

Undercover has learned that Charlie Watts has quit The Rolling Stones. A source within the Stones inner-circle says, "Charlie Watts has quit the band. He will never record or tour with the band again".

The news does not come as a surprise. It was common knowledge that Keith Richards had to talk Charlie into contributing to the A Bigger Bang tour but this time it seems there is no calling Charlie back to active duty.

"The Stones are looking to Keith's Expensive Winos drummer Charlie Drayton to fill the void in all future Stones' callings," our source says.

With Mick Jagger planning more Stones activity next year, the departure of Charlie will be a huge blow to the band. Charlie was the backbone of the band. The 68-year old drummer simply doesn't want to do it anymore. Charlie joined the Rolling Stones in January, 1963. He didn't expect it would last. In fact, he kept his day job for several months until the band started to feel like a career.
Charlie's decision to quit the band comes a three years short of the Stones 50th anniversary. The Stones A Bigger Bang tour ran from August 2005 to August 2007. It was the highest tour of all-time.