Why not make terrain effect combat?

If tile based, simply give each tile properties like traction and steepness, and elevation.
High-ground attacks are more effective. Melee attacks are best made on flat, solid ground. Magic attacks improve when nearby a particular element? Running speed increases on a downhill slope, and decreases on an uphill slope.

This might make two identical encounters a rather different fight, even if they happen only a few yards from eachother.

Havn't read through all the comments... yet, but I wanted I thought that "Depths-of-Peril" was worth looking at in regards to dynamic quests and semi-emergent game play.

It is somewhat a diablo clone, but there are competing adventures who may complete quests before you and you will not be able to do them yourself. All the quests (other than the initial tutorial) are random.

There are random events happening as well, for example: a unique monster may spawn in some location, and a NPC will give a corresponding quest to deal with him. BUT if no one does the quest in a timely fashion the monster will grow in power - eventually attacking the town. The game also has disease that can effect towns people and if no one bothers to get the cure they may die- and all of that NPC's quests will be lost. I've only played through the demo a few times, but it has a lot of the elements that we are talking about here.