From the looks of the promo materials they have up on Blu-ray.com, the new film takes place between the first one and The Road Warrior, since it appears he still has the V-8 Interceptor (or could he have acquired a different one? I'm not sure), and that the character is still dressed in the leather outfit from the first two outings. Based on these observations, I'd be more willing to think this was a side story than anything else.
One thing that does have me interested is that a former Mad Max player is in this one, albeit in a different role. Hugh Keays-Byrne, who played the Toecutter in the original, returns in the new film as the chief villain. I'd love to see what he looks like in this one.