Just a small update today. I spent the weekend with my family and haven't had much time over the past two days to get much done, I did however whip up a scene background, added a cursor of my own, and changed the other cursors (not shown in the screenshots; I basically just removed the background behind them.) I don't have the full version of Fraps, so I was limited to 30 seconds and didn't show the node-based scaling and kind of rushed through it; I'll definitely post some better movies as soon as I can afford the full version. I didn't feel like making another movie just to show the node-scaling, so I just took a couple screenshots this time around.
Basically, every object has a local scale and every path node has a scale. The objects are placed on a node and scaled via the nodes scale value. Likewise, as a character moves from node to node, they are linearly scaled.
Mostly working on getting the rest of the engine planned out while trying to decide which project I want to move forward with for now.
Great job with scaling the sprite to show depth!