Yeah!
Watching your character in the world was really fantastic. I suppose since no one saw it like this, it wasn't missed -- but I played the game like that for over a year and to see it removed just before release was so depressing. It made the Gael Serran less vivid.
RE: Dark Engine.
It's a different engine and every engine is so different once you get down to the nuts n' bolts. Despite the Dark Engine looking very dated, it has some incredible gameplay. Thief is probably one of the few games I devoted hours to exploring every nook and cranny.
I even made a Thief-type town using the Deep6 (Wizard's) engine:
http://www.darkslayers.com/deep6/thumbs/d6-down-01.jpg
http://www.darkslayers.com/deep6/thumbs/d6-down-02.jpg
http://www.darkslayers.com/deep6/thumbs/d6-down-03.jpg
http://www.darkslayers.com/deep6/thumbs/d6-down-04.jpg
http://www.darkslayers.com/deep6/thumbs/d6-down-05.jpg
http://www.darkslayers.com/deep6/thumbs/d6-down-06.jpg
Thief III is in the works, but it'll use a different engine. I believe they're looking into using the Unreal or Lithtech engine.