Game design blog Sirlin had an article about the death of the Graphical Adventure Game genre. While this is nothing new, he has a theory on how to craft a GAG with more dynamic gameplay elements. Here's a clip.
Itâ€™s probably not technically feasible to allow different outcomes to branch into a huge tree of totally different stories, nor is it even desirable. The opponents of interactive fiction state that any story is really 1,000 possible stories where the author intelligently chose the one, single best story to tell. It would still be possible, though, to create a game world whose major story arc was resistant to change, while allowing change on the smaller scale. It might even be fun.