On Game AI

Games That Design Themselves on h+ Magazine is an interesting article on varied approaches to artificial intelligence in games. One example they use is a project called The Restaurant Game, a research project at the MIT Media Lab, and the other is Façade, "a one-act interactive drama," involving a family squabble (thanks David). Both games have been around for a while, but they use each as examples of fresh thinking from an AI perspective. Here's a bit from the description of The Restaurant Game, which will credit anyone who has played a game as one of its designers:
This project attempts to address two frustrations I experienced as a professional game developer. 1) Convincing human social behavior is difficult to model with existing hand crafted AI systems. 2) Play testing by people outside of the development team typically comes too late to have a major impact on the final product. This experiment aims to generate AI behaviors that conform to the way players actually choose to interact with other characters and the environment; behaviors that are convincingly human because they capture the nuances of real human behavior and language.