But, I have a concern about the community here all of the sudden. Marcus' response made it clearest, though - you guys have no appreciation for stylization or foreshadowing.
You have a concern that people enjoy playing videogames? Don't put words in my mouth; I have an appreciation for good prose. What I hate is when bullshit is tainting my videogames. I hate how this generation of videogames have suddenly gone into this "blending of cinema" crap. Games are meant to be played, first and foremost, and when developers (especially of RPGs) are like "well, story comes first" then I just see that as a cop out for bad development.
Have you played Half-Life or System Shock? Fallout? No One Lives Forever? Arcanum??? Call of Cthulhu: Dark Corners of the Earth? Ico and Shadow of the Colossus? Deus Ex even! Those games had some of the best stories told ever in videogame history, both from a literary point and a cinematic point but NEVER ONCE did they say "Okay, STOP PLAYING THE GAME we're going to make you watch it now!" Half-Life and System Shock never snatch the controller out of your hand. Fallout had tons of back history that was left up to you to discover.
Videogames are about interaction. A movie is like a rollercoaster ride; you only see what the director wants you to see. Books are the same way except your imagination takes over for the pictures. Videogames are about self discovery; a bond between you the player and the developer's world. Good videogames let you discover the story personally through this interaction. If you take control away from the player, then you'll leave them feeling alienated and they won't appreciate the person they're playing as.
This is what happened with Solid Snake in MGS2. Everyone was so used to playing as Snake that when the game shifted to Raiden, a new unintroduced character, it threw off a lot of fans. MGS2 actually had perfect story telling; even though the cinemas were long, Raiden was a complete mystery making him a believable character. Few fans seemed to understand that he was a blank slate in a postmodern project for collecting data on a living entity (I don't want to argue about this game now), but MGS2 was the closest any videogame is going to get into crossing that realm of cinema and literature.
Mass Effect will probably come a close second but I respect that Bioware respects the player enough to let them play the damn game.
So my basic rule of thumb is don't take the game out of videogame. You may be making an RPG with heavy story elements, but a book will always be infinitely better than whatever you have to tell because I can read a book at my pace. In a videogame, I have to put up with dungeons and FILLER to reach the story.
Opinions will vary, but I always view gameplay as being infinitely higher on the food chain than anything else.
Xenogears is actually my personal ideal (for what I call a "tough plot"). Mid-length forshadowing/cryptic passage, short-mid-length expository text, and an optional short glimpse into the future. Again, establish the tone, establish the setting, establish the context. Perfect intro.
I don't know about you, but Xenogears was pretty terrible. They had a good thing going all the way up to the second disc then it all came tumbling down with bad references to an old sci-fi movie and a bunch of garbage that didn't make sense or have anything to do with the previous 30 hours of gameplay. It's just like you said; time contstraints. It's almost like the developers said "okay... we can't make the rest of the game so we need to tie all the loose ends as quickly as possible!"