Surprised I haven't seen any discussion on this, but the preferred alignment was posted a few days ago:
http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=b57a8d0195ce1410VgnVCM10000071d60f89RCRD
Oddly, they don't have a direct link to the PDF version of the presentation and it's impossible to read the labels on the Slideshare version.
Here's the PDF on Dropbox.
The design looks quite nice, particularly the bridges, of which there are four proposed -- one over the Newmarket sub south of Dundas and continuing over the No Frills parking lot and Lansdowne, and one each over Brock, Dufferin, and Queen. The route would only deviate from the rail corridor north of King, where 99 Niagara is built right up to the Metrolinx property line. I understand that that property is to be redeveloped, which might provide an opportunity to move the trail to its own dedicated alignment in the future. That section of the route is a bit disappointing, as the proposal just calls for sharrows on Sudbury and a crossing of King at grade with no special facilities. It's a pretty significant gap in what's otherwise a very well-connected route, but I guess there's not much that can be done as long as Metrolinx requires the full width of its ROW.