According to Michael Jones at Variety's festival blog, the scarcity of U.S. films is simply the result of not very many homegrown films being submitted. Some likely candidates, like Darren Aronofsky's The Wrestler and the Coens' Burn After Reading, chose to focus on other festivals. Other contenders, like Revolutionary Road, Milk, and W., aren't done yet. The writers' strike and the big studios' ongoing financial problems with their art house divisions also contributed to the dearth of American product.
It looks like a fantastic foreign lineup, though, with 22 films from 14 different countries. You can see the full list here (and there might be some late additions), but some of the highlights include: Mike Leigh's Happy-Go-Lucky (U.K.), Philippe Claudel's I've Loved You So Long (France), Kim Ji-Woon's The Good, the Bad and the Weird (South Korea), and Ari Folman's animated Waltz with Bashir (Israel).
The Telluride fest takes place over Labor Day Weekend every year in the small mountain town in southwestern Colorado. To maintain its reputation as a down-to-earth, unglamorous, it's-all-about-the-movies festival, the organizers don't announce the lineup until the last minute, thus avoiding most of the hype and celebrity-gawking that plagues Sundance. Cinematical's Kim Voynar is there, so watch for her coverage over the weekend.