Yahtzee: Dead Space is one recent game I can think of that tends to keep its cutscenes within gameplay, as well as telling quite a bit of story in the background and ancillary details, but it still falls down for me because it lacks another vital component of storytelling, that is, effective pacing. The importance of that depends to some degree on what sort of game you're making, and in horror it's crucial.
As for dialogue trees, it depends how they're done. The Bioware standard of having the characters stand woodenly across from each other running down a shopping list of options one by one like a job interview, I always find that slightly tortuous. I liked how Alpha Protocol did it, with a little timer and an analog stick selector to keep the discussion ticking along, I just wish it could be worked more organically into gameplay.
I'd like an NPC to start talking to me as soon as I come close to them, rather than staring mutely at me until I hit the context-sensitive prompt flashing over their heads. I'd then like to still be in control of my character throughout the conversation, walking around, fiddling with ornaments, hunting through drawers, shooting arrows at bunny rabbits, etc, with dialogue options being selected with some quick on-screen prompt using a button or control that is otherwise unoccupied. I don't know if you guys saw the Plinkett review of Revenge of the Sith, but he makes a good point that all the dialogue scenes are just two people standing (or sitting) and gabbing at each other, and it's incredibly dull. People do other things while they talk; it makes for more dynamic discourse and an opportunity for characterization.
I agree with this statement.
That is to say that I think storytelling should be done NO MATTER WHAT. It should bear some form, be it an involved network to uncover, an ultimate goal or a distinct culture. Even sandbox games need that.
I also think that a decision that becomes inconsequential serves to diminish the game, though you should know what you're saying. To me, the ideal game offers dialogue options via the d-pad (because it's so rarely used), without interrupting gameplay. You always know what reactions your choices generally provoke (for instance, up is the moral high ground option, right is the suspicious option, low is the zero-tolerance option, left shifts to an alternate menu where up is the "it'll all be all right" option, left is the sarcastic option, down is the total prick option and right shifts back), while these will dictate future actions of the NPCs, you can't accidentally kill someone or block off a quest (accidentally applies to that, too). What it should do is dictate how the NPCs react to you, if they're likely to show a blatant dislike of you in public and how they propose character-specific quests, as well as the romance options because what game isn't better without those.
What I agree with is the fact that cutscenes are abused. Don't get me wrong, some are a good idea, but all too often they force the linearity of a game and are used much to frequently to do something an
interactive medium isn't supposed to do, which is tell a story over which you have no control other than in which order the baddies die.
This may also overlap into an interactivity debate because even without conversation a player could influence the game. In a good game (a really good one) the way you complete one section could dictate parts of the next. Fire emblem almost managed this: if you let a character die, they no longer appear in cutscenes. But I think it needs to be farther-eaching than that.
If there is one thing that should be drawn from this it is that every part of a game should be its story. The environments and random NPCs/enemies define its culture, the important NPCs should be at least complete characters, all of the player's actions should have consequences (though only small ones) and the flow should never stop except for a very good reason.
That's a perfect game.
This would also call up the importance of atmosphere and atmosphere versus graphics, but I think I've run off at the mouth long enough for today.
