I think everyone figured this one. I don't see the Undertaker breaking character to induct him though. But a couple of things pop into mind: 1) he just did a motorcycle commercial where he was more his real personality (American Bad Ass) than the Phenom, even though he didn't speak a word, and 2) they were gonna use the real life footage of the confrontation between him and Brock back from the UFC show in October 2010 to hype up their match for WM27 but then the match didn't happen (he was obviously out of character then, too.)
They'll still probably have Kane do it. I wonder if Taker will get involved somehow though, like after Kane's induction speech, the lights going off with Taker saying "Rest In Peace, Paul" heard throughout the entire building with him pretending to be in character, corny as that night sound.