That's completely realistic. By moving to DX8 we gain access to new features we can take advantage of. We're not going to have time to do it all, but there is a possibility of things like bump mapping on characters, and some vertex shader effects. These are things that Glide prohibited, but are fairly simple in DX8. If you are happy with a game's performance on it, then that's great.
Different people have different thresholds for performance.
All we can do is optimize as best we can and see what happens. Individual sounds will use the Microsoft WAV format. The music engine will support MP3 playback. More information will be available soon. It's not pre-recorded animations played back on the bones.