[Update #49: Water, Trees, Day/Night, Lighting... All That Jazz]

Also my only real comment on the environment vid:

The "debris" from the waterfall seems way to dominant, looks a bit like a tool employed as a mechanism to hide the edge/collision between the water falling down, and the still water in the lake. However I am not sure this is something that would be easy to solve with the 2.5D constraints currently employed.

[Update #49: Water, Trees, Day/Night, Lighting... All That Jazz]

Hi, I am overjoyed to finally get a glimpse of how the environment will look like. However, being less knowledgeable about the whole design of things, I am very keen to know how dynamism was achieved if there was no 3D geometry involved. And if my eyes were failing me, I thought I saw some shadowing when the light hovered over the statues, which if were 2D, wouldn't be able to cast shadows right? I don't know a lot about graphics rendering and 3D stuff so do pardon me if I missed something obvious.

 

Great work! I've been a fan of Interplay and Black Isle since I was a kid. Brain imploded and exploded after watching this vid XD

 

Well you do not need 3d to have dynamic lightning. You just need 3d information for the lights.

This means that you will have to model it in 3D, render out "normal maps", and tell the lights in the scene(in unity or whatever engine) to use them. 

This is normal maps:

http://en.wikipedia.org/wiki/Normal_mapping

 

This is a video from youtube that shows an example:

http://www.youtube.com/watch?v=f31sC52j7Po