Check this out: link
I had seen things like this being done with Macromedia Director before, but none have been anywhere near as well implemented as this. It is simply amazing.
You play against bots, but there is a multiplayer mode, though it takes some setitng up.
Once they have a 'lobby' type feature similar to the online game sites where you can play pool ect... this will really take off. A quick and easy (and free) way to play deathmatch games.
Am I the only one who is really impressed by this?