I haven't done any work on the Baldurs Gate Clone document, except paste in a complete template for the Design Doc. I have taken to listening to the Baldurs Gate 2 game music in order to get me motivated to complete this project.
I started talking to ArchWizard today about the possibility of Dynamic music. As a concept it seems relatively straightforward to me, but the real test is whether content can be made for the system that is workable (and worthwhile) in the game.