Over the past 15 years since the release of Return of the Jedi, George Lucas has stated that Episode 1 of the prequels occurs as early as 50 years prior to the events that occur in Star Wars, Episode 4: A New Hope.
The Star Wars Insider (SWI) (1-800-TRUE-FAN) printed a fold out timeline of when the prequels occur in relation to the current trilogy.
According to the SWI, Episode 1 of the prequels is set 32 years prior to SW: A New Hope. Anakin Skywalker is about 9 years old. His future wife, the young Queen, is approximately 15 or 16 years of age. Obi-Wan Kenobi is in his mid-twenties. And no one is sure of the exact ages of R2-D2 and C-3PO. Episode 1's plot is rumored to be based on the Japanese film, the Seven Samurai. In which a group of warriors save a small town from evil doers. Allegedly, the Jedi Knights free the young Queen's homeworld from bondage.
Episode 2 of the prequels begins about 10 years after the events in Episode 1 unfolds. It is expected that the clone wars are not underway until after Episode 1 ends. Anakin and the young Queen are married at the end of Episode 2 and our heroes are left hanging in the worst predicaments of their lives . . .
As it stands now, Episode 3 begins approximately 2 years after Episode 2. By this episode, Anakin has become a great hero of the wars and yearns for great fortune and glory. Consequently, Anakin is lured to the dark side by the then Senator Palpatine. Anakin alias himself with the evil Senator Palpatine and eventually leads the Imperial destruction of the Jedi Knights and the governing infrastructure of the Old Republic. Near the end of Episode 3, Obi-Wan Kenobi confronts his former apprentice, Anakin Skywalker, but is unable to bring Anakin back to the light side of the Force. These two great warriors engage in an epic light sabre duel which Obi-Wan wins. Anakin is left for dead and eventually emerges from his near death experience as the nefarious Lord Darth Vader. The last remaining Jedi Knights hide the Skywalker twins in hopes that they will one day sow the seeds for the destruction of the Emperor and his evil Galactic Empire. Episode 3 ends with the Old Republic in its worst state in history with absolutely no hope for the future.
The most anticipated battle sequence is the great Oceanic or underwater battle that is rumored to occur somewhere in the Prequel Trilogy although this has never been confirmed . . .