There's an interview with Aidan Scanlan on Lost Universe talking with one of the designers at BioWare currently at work on Neverwinter Nights, their upcoming RPG. The following Q&A cover how the game's planned DM feature will work:

[Treborg] Could you please explain how the dungeon master feature will work in the game?

[Scanlan, Aidan] If you choose to play as dungeon master, the game will handle you as a special Dungeon Master client. You will be given a wide range of powers that affect the game. The primary of these is the possession of monsters and non-player characters. By possessing them, you take complete control over their actions. You can speak through them and command them in combat just like a player character. You become their puppeteer. Other powers include the ability to spawn in creatures, trigger scripts, lock and unlock doors, hide treasure, and so forth. All of this can be done dynamically, while the game is in play. Our intention is to make the Neverwinter Nights Dungeon Master experience as close to pen-and-paper Dungeons & Dragons as possible.