Interactive Storytelling is a tough nut to crack, so the rule there is keep your experiments to rapid prototypes. Some have spent years building monolithic engines, complete with editor and web-service, before providing playable demonstrations of a particular algorithm, and god bless them. Den Benmergui has done with his Storyteller experiment.
Taking more pages from Braid than Storytron, Benmergui's Storyteller takes a vertical slice of causality and serves it up for ready manipulation. Instead of pushing a story forward from the perspective of a protagonist, acting in a linear, causal manner and then adapting to the changing flow, you play director and reader all in one. Simple click and drag a character to change their situation and relationships with the other characters. The combinations are quite interesting, and the play feels less like acting out a role and more like puzzling through quantum physics.
The story told in this prototype is basic, yet striking in the poignancy it's capable of evoking with a few 32x16 sprites and shreds of text. The first act demonstrates a class divide between these characters, and your agency consists of moving each individual over the poverty line. The second act shows the consequences of this divide, where the poor have become wizards (a Marxist fable for sure), taken prisoners, and the formerly wealthy are stacked with armor and sharp swords. The final act shows the aftermath, who lived, who died, and the outcome for the society. In each instance, the eyes mean everything. Whether closed in a droll resignation, glancing up with envy and hate, staring intently with a heart, or wandering down in remorse, these bits of pixel mean something in relation to the other entities.
Dan is currently working on other versions of this idea, including a time-travel scenario and possible a mobius-strip scenario like Mulholland Drive, there may be a rad future for this game mechanic. It's very context/content oriented, with lots of exceptions; it lies in the no man's land between highly procedural content and easily editable content. It was also accepted with some of his earlier experiments into the Sense Of Wonder Night at the Tokyo Game Show. So that's cool.
P.S. There's a gay ending, not the first game to feature that as content, but the first game to feature that as an unexpected emergent property.