Although I'm not suggesting you go this way, it puts me in mind of flat, hand-drawn characters put in the world with no attempt to make them look 3d at all.
Yeah, I was thinking the exact same thing when I saw the screenshots. One of my favourite console RPG's is Breath of Fire 4, which I've just bought on PC so that I can play it again without digging my PSX out again ( PS2 won't play BOF4 because it's a US import ) and it does precisely this. It looks great imo and much more original and interesting than most RPG's.
BTW is this going to be a REAL rpg ( console style ) with turn based combat and everything? I've always wanted to see a proper console style RPG made in Blitz ( and have begun work on one myself, but more commercially viable projects are taking precedence )