This all sounds very promising but it would be even better if the video would work. I open up the link which works fine, WMP pops up and it keeps on loading for 10 min

Edit: Got it working

About the game, this looks very very but I mean very promising and pro !!
The animations until now are great if not perfect. The dynamic lights are good but they sometimes react slow to the environment but I guess that's an engine issue. Your fighting system is good but when you encounter an enemy, your main player immediatly has got hold of his sword and shield, try putting his sword and shield on his back while running/walking. While encoutering enemies than, the look of the main player grabbing for his shield and sword looks way better as in Oblivion The AI as HeelX mentioned could be improved, I guess this is your most important working point. About the level design, it really gives a 'Hero Of Olympus' feeling if you know what I mean ^^ But as EXCiter mentioned, more vegetation would complete this feeling to the full.
In overal, amazing work !!

Cheers

Frazzle