Yes I have read a number of his stories, and so have the rest of the design team. It is certainly easy to be inspired by them, so coming up with the story for the game has proved relatively easy. The game will use the NDL NetImmerse 3D engine, running through our own custom game engine which will handle the AI, physics and so on. The NetImmerse engine lets us do a load of cool things and advanced features which should really enhance the look and feel of the game. To reach as much immersion as possible, the whole game will be in the first-person perspective, and there won't be any indicators on the screen, just like in real life.
Music has always a big importance for the game atmosphere.
We will use it for non-game sections, but we really wanted to build on the atmosphere by using creepy spatial sound effects to build tension. The endings will be pretty much the same, but how you reach it will be completely different depending on your style of play. There will be crossovers where you approach similar situations, but we want to build replayability into the game for people to enjoy it again and again. The game should be out around Christmas next year, with a demo maybe in November or October - nothing is certain yet. Here is the last question - there are many debates about pronunciation of the word Cthulhu.