Whilst this maybe not the answer you're looking for, I'd say that you should use a little bit of both, depending on the context of the situation. The player not not enjoy being constantly forced to choose a path as it were, feeling that their decision making was taken totally from them and highlighting the deterministic nature of the game. The player should feel the sense of achievement by being 'fooled' into thinking that they have figured the problem out on their own - I say fooled as the decisions will largely be predetermined, right?

However, there will also be times that the player would want to sit back and let the computer offer them suggestions, either choosing to take one of those or possibly inventing their own solution (depending on how free reign you wish it to appear). I think it'll bode well to implement both, especially if the player is a leader of a team. Team leadership isn't just about 'my way of the highway', the idea is that people in the team support the leader in their decision making process - in this situation, the team would offer up their own suggestions and the leader would be up to pick from one, but there will also be times where the fate of the team lies on the leader's ability to come up with their own solution.

I hope this was useful.

I find most times when a game says 'You realise....' that it sounds patronising. Although if you've already worked something out on your own, and then the game tells you, you feel good because you kind of got there first.

I find In memoriam to be the best way of doing this, although it does use email which most games don't. If you work things out for yourself, then you feel good when a character emails you about it, but if you get stuck then they help you along.

So in conclusion I think you should use the 'You realise...' approach sparingly, and only when the character you're playing as would probably have worked it out, but a normal person, i.e. the palyer, probably wouldn't.

In general the kind of upstaging you talk about is what I notice in console RPGs. While giving the player the ability to choose whether to accept or reject the choice (or give them a selection of choices) would be acceptable, I think what you want to avoid is the console fault of simply "forcing" the player to make a "choice" as a cheap way to advance the story. Nothing is worse then seeing "your" character make a grand show of making a descision you know (via standard cliches) is going to lead to disaster (since the designer/writer didn't come up with a way of getting the player into the bad situation without it being the players fault)

This may sound pedantic but I would say the game saying "You realise..." is also 'Upstaging the player' because what it's really saying is "Your character realises...". IMHO when I play a character I don't want the game telling me that my character's smarter than me :). I think it works for directing the player, for instance the character saying "I'll never get past them, I better find another way around", but for major quest/problem solving I think I'd feel like I was cheated out of the challenge.

As to the difference between your character and another providing the information, both can work but with the PC it has to be done more carefully. They can talk to themselves and provide insight that way, or talk to you directly in some game types (graphic adventures come to mind). Having the NPCs talk to you makes them more alive so them giving advice is a good excuse to get them talking. Especially if two of them don't like each other and argue over which of their solutions is better, thereby informing the player while building up their characters.

For the example in your original post, I would say it would be best to let the player try to work it out for himself to begin with, as this gives the greatest reward for the player if he succeeds. If he's having problems, then giving him a hand will help prevent frustration. As well as NPC advice, you could add sub-quests which will make the ultimate solution easier or more obvious (visit the village elder for advice, but he wants something first and so on).

Fulby

I like the idea of NPCs coming up with the brilliant plans and having the player make the decisions. Reminds me of how one of my uncles used to manage his department at BC Hydro. He always said to hire people smarter than yourself, and don't worry about one of them taking your job, since finding a good replacement for you is a pre-requisite for promotion.

If the player has the perspective of the "big picture", then he is in a position to evaluate brilliant plans. Maybe the NPC's could become resentful if you reject their ideas to often. (in order to keep your brilliant but bloodthirsty tactical officer happy, you have to go medieval every so often.)

I remember a space game (I think it was star flight II), where you encountered a rather beligerant race. In order to establish good relations with them, you had to approach them with weapons armed and shields up and just about every 2nd thing you said to them had to be a threat.

Once contact was established, you could do a crew exchange to obtain the galaxies finest tactical officers. After doing that, I then had to do some business with another race. To get anywhere with this race, you had to kow-tow and grovel. My tactical officer ended up committing suicide.

What I think usually works well is if several NPC's offer their perspectives... One says, "If only he were dead, we'd be free." and another says, "Too bad we need him alive, he's the only one that keeps the bad guys from attacking."

You're now given the choice, either through direct actions (actually attacking or not attacking him yourself) or even just through an option menu. The game has sort of presented you with only two options, but it's worked into the storyline in a way that makes it less noticable. Other clues and information obtained elsewhere may help you make a more informed decision. If you want the player to come up with a brilliant solution himself, try to seed the situation with enough clues that indicate there is actually a third choice available that isn't readily apparent...

If you're going to have a "You realize that..." moment, then at least hide it by having it be an NPC reveal or mention something...not come out and say it, but lead the player to the inescapable conclusion. At least this way, the player sort of feels like they realized it themselves, without being told that they realized it.