I was thinking the other day about story being told in terms of in-game level design and situation design. I think that in a non abstract game you should be able to look at something and work out a reason why it is there. Ie. If you are walking through a level and being attacked by mutant aliens what are they doing there, why are they attacking you, why are you in the place you are in, where are you going, where are you going away from? Why are there so many aliens in the level, who has noticed them, why haven't the police come, or the army? etc.

This is probably one of the better ways to immerse the player into the game/story. I hate to keep using it as my example for everything good about games, but HL2 did this pretty well. If you want to know what's going on, you need to listen to the propeganda speeches in the streets and on televisions. You have to talk to people on the street. You have to take notice of newspaper clippings. You could just as easily ignore all this stuff and run right past it, but the game never really spells everything out for you. You need to notice things people are saying and what's in the media to put the story together.

One of my favorite things is how the places you go to seem to have a history and a story behind it. An old, abandoned farm house with windows boarded up and furniture piled up against the door. Something had happened here, something terrifying... the residents were doing anything they could to keep something out, but what? It's just part of the contextual clues that are presented about the story that help to give it shape.

Is it possible for everything to have meaning? Sometimes it can be useful to use mostly boring objects so that the audience focuses on the lone interesting object in the scene. It's like using negative space, or rests in music. But mostly I agree, designers should use meaningful objects to create an immersive, coherent-feeling world, and be careful not to toss in objects that might have the wrong meaning and interfere with what they're trying to communicate.

As Taolung pointed out, a good fictional world is immersive. Events happen that don't directly impact the player's persona, giving the impression that the world has a life of its own. The world has a past and a future regardless of what the persona does. It's like reading the newspaper; you can see cause and effect, you can see dramas play out when they don't affect you personally, you feel you're a part of the world.

In a good game, the persona's actions should have some impact on the world. In the same way, the player should feel that the persona is a part of that world.

So everything in a game should have a reason for being there. If it's not important to the persona itself, it should establish that sense of belonging to a world. The more thoroughly you can establish that background, the more deeply the player will feel enmeshed in it.