There is already a game in development using this technology - "Get Even" by Polish studio The Farm 51:
http://www.youtube.com/watch?v=L48SdXmd0_k
http://www.thefarm51.com/index.php?module=news&id=50&menu=1&...
http://www.youtube.com/watch?v=L48SdXmd0_k
http://www.thefarm51.com/index.php?module=news&id=50&menu=1&...
I'd really like to see a before/after comparison, to see what the original environment looked like, as well as an actual description of what they've done.