Very cool atmosphere, I love the crowd wandering around in the shopping district. I like the combat, but it could sure use some tweaks. It is very annoying to swing at an enemy four or five time then find yourself at his backside. That, combined with the slight delay required to let all animations play out make for somewhat frustrating battles.
This whole game reminds me of the Hercules Arena from Kingdom Hearts, which was one of my favorite parts of that game! The way characters are engaged in different activities in the bg/fg really helps breathe life into this game.
I really didn't like that spells are so hard to aim. You should build a quick targetting system for them, otherwise they seem pretty much almost useless.
out of 10...
gfx - 9 (killer effects, especially lighting)
sfx - 9.5 (good music, cool sfx, good quality)
design - 9 (great concepts come together for an immersive experience)
gameplay - 7.5 (pretty fun, but needs some tweaks)
overall, this is a brilliant concept with great atmosphere and excellent graphics that only suffers from reaction-speed delays in combat and lack of great functionality in attacks.