There's an interesting article on some research by an assistant professor at a US University, which could lead to limitless story possibilities, all generated by the game itself.
"The idea in my research is, let's come up with a model of what storytelling is. The computer can create an initial story for you. While you're walking around in the beginning of the story it fills in new details for you to experience later on. So that no matter what path you take, you end up sort of having a great experience. But the idea is, it's not done at design time by people. It's done using this model of what storytelling is at the time that the player, the user of the computer system, is actually experiencing it."
They've been doing some testing using the Unreal Tournament 2003 engine, so hopefully we'll get to see some of it in action soon! Article over here!