Current work is on an inventory system. The basic user interface is in place. By default you have no inventory space, you have to drag items from your left or right hands into equipment slots to equip them. All inventory space will come in the form of pouches and rucksacks you have to equip the same as armour.
Here's the inventory UI so far;

And here's the format of the creature data that defined those equipment slots;
[creature]
[type:Human]
[mesh:human]
[stats:5:5:5:5:5:5]
[speed:3.2]
[equipmentslot:Left Hand:0.3,0.55,0]
[equipmentslot:Right Hand:0.7,0.55,0]
[equipmentslot:Helmet:0.5,0.15,0]
[equipmentslot:Body:0.5,0.4,0]
[equipmentslot:Legs:0.5,0.6,0]
[equipmentslot:Feet:0.5,0.8,0]
[equipmentslot:Left Pauldron:0.43,0.3,0]
[equipmentslot:Right Pauldron:0.57,0.3,0]
[equipmentslot:Left Gauntlet:0.4,0.5,0]
[equipmentslot:Right Gauntlet:0.6,0.5,0]
I'm not sure if it's just me, but the audio level in the development video was really low. I maxed out my audio levels and it was still pretty hard to hear.
Yeah a lot of people have commented on that, I think the audio levels of my PC must be out of whack. If it's any consolation I'm nothing saying anything very interesting.