i''m not sure that THE SIM RPG would make better story than FINAL FANTASY just for an example
what do you really want? dinamic world or dinamic storyline that adapt to player''s choice??
and NO it does''nt require GREAT ai to create dinamic plooting, actually it''s more like creating a NEW WAY OF WRITING than anythings else, we suck at this new form that''s why we find it hard, dinamic story has been study in academics for years (google for talespun one of the oldest or facade and the oz project for the later)
the fun things is that the best theory about this form of writing provide model that REALLY look like the engine of a dating sim game (sunandshadow i think this would be interest you)
the problem all lie in the writing structure (well know in script writing, less in interactive because a lack of analysis shadowed by ideology)
the last note, before making the cutting edge engine that have script recognition, facial expression and the kind... we must acheive simple story dinamic plotting, because they are only enhancement, a story without image and sound is still a story
pfffffff!!!! you can''t eat the cake and have the cake because eat the cake cost a cake, but you can buy the cake factory 
actually i''m running small experimentation that work well under RPGMK 2000 then why not in C++? dinamic plotting next year generation with last year technology
i''m more interesting in story generation now (i mean from scratch, create everythings)
>>>>>>>>>>>>>>>
be good
be evil
but do it WELL
>>>>>>>>>>>>>>>
