I'd actually rate this aspect of the game as the weakest part of the game. However, the scenery is for the most part static so while pretty it feels like you're walking through a postcard. I am sure this will be rectified in BG2. Overall well done. Music is appropriate for the most part.
Sound effects are excellent.
If I could change one thing in this game it would be to have more music and a greater variety. Believe me, you get a little tired of the same tunes over and over again. There are tones of NPCs to talk to. I would recomend this to anyone that doesn't mind reading a 150 page manual for a great game with exellent replay value and a great storyline. Until now my life has been complete, all of you roleplaying fans out there have to play this game.