The Coptic language is indeed a direct descendant of the ancient Egyptian language, especially of its later demotic version, that featured in the Rosetta stone and enabled Champollion to decipher the hieroglyphs.
The reason why it's called "Coptic" is simple, it has only survived in the Coptic Christian Church, as the language of its liturgy. The language slowly but steadily disappeared in Egypt after the expansion of Islam in the 7th century, when Arabic became the dominant language.
Edited by Komnenos - 28-Sep-2006 at 09:06