Based on this article and its comments, I think people have extremely varied beliefs in what an "emergent story" is, to the point where they seem to be making each other angry. I've seen this before and it always surprises me. If game developers find new ways to make games and game narratives that people enjoy, I'm all for it. There's no reason to believe that emergent storytelling (whatever that ends up meaning) will herald the death of on-rails narratives.

Everyone seems to have divergent ideas about what emergent narratives should be. What I would like to see is something like an evolution of L4D's AI Director, but in its final form it would be a Narrative Director. The game design/writing team would have a story to tell and a theme to maintain and the Narrative Director would monitor the player's activities and alter the game world to preserve said story/theme. The big transition here from linear narrative is that the creators can no longer cling to a completely predetermined story. I think Valve is taking this approach and the AI Director is their first step forward (but I could be wrong).

One last bit: Concerning the discussion of permanence, I think that shorter playtimes for games will be required because if a game lasts 30 hours I don't want to spend the last 25 hours lamenting a decision or mistake I made 5 hours into the game. However, if the playtime is too short, the permanence looses its meaning. For example, a major character dying by your actions won't hold much meaning in a half-hour game. I'm thinking 3-5 hours for a play through are a good starting point, but that could vary greatly by the scope of the game.

-Jason