To be brief, Blade Engine at http://www.bladeengine.com/ has released their game engine for free for use in visual novels.
It is probably best if you look at their web site for more information as to what a visual novel is. In short it is a computer game with very little input from the player/reader.
I wonder if this might not be the future of novels. Once everyone has a cell phone with a reasonable display and memory why not simply sell licenses to a book or movie and the cell phone downloads the next chapter as needed.
There are other game engines available. Torque from gragegames.com, blender, just google game engines for a big list. Even flash from macromedia could be used. (If you are interested in flash check out koolmoves.com.)
Dave K