So basically, the situation is similar to the one experienced by Capcom when Dead Rising was due for release over here - the game was rejected a rating by the USK ratings board. This means that Microsoft wouldn't be able to advertise the game and that shops wouldn't be able to put the game on their shelves - if you wanted to buy Gears of War you'd have to ask the cashier for it and then be slipped a copy in a brown paper bag.
Following the ratings decision Microsoft explored the possibility of creating a version that could acquire a rating, but unfortunately this was incompatible with other versions released around the world when played on Xbox Live, so now Microsoft has decided to just not release the game, period. Germans still wishing to play Gears of War will likely have to import it from Austria, or the UK.
http://ve3d.ign.com/articles/740/740000p1.html
Ain't censorship grand?