If you want to use less memory, then I think you should stick with the previous idea.
But if you want more speed and have more memory to waste, maybe creating an empty large bitmapdata and put all the whole stuff in it at the 1st time run(like Flixel did with it's tile map)

But considering your game's genre is strategy game,I think you'll never need fast rendering speed, so maybe you should stick to the first idea

Sure, looks creepy, but I prefer thicker mist(limits visibility) for the outdoor. Reminds me Silent Hill a lot.
I wonder what FPP stands for?

I made this using floodfill algorithm only, the main drawback is that it only suitable for non-realtime games(ie. only for turn based games)
http://filebin.gamedevid.org/view/100ea/

A simple pathfind, only use floodfill algorithm:
http://filebin.gamedevid.org/view/100ea/

using flixel

Have you played Fable? It strikes me as very similar to what you want. If so, what was your opinion of it?

Ah yes, Fable, how could I forget the game. I once slauhter the whole citizen in oakvale town(the village where you can do chicken kicking contest), buy their abandoned house and rent them, wicked.

How about , instead of having the scrolling stuff, you make the platforms move upward, thus creating an illusion that the player is falling down?

Nice , running smoothly in my old PC(P4,Onboard graphic). Running at 60-80 fps, cool.
Except the fact that I've reloaded the page 5X and still stuck on the top left. Maybe you can spawn the block with some exception like everywhere elese outside the player start point:P

I agree with XRA, I also read this:
http://www.worldofleveldesign.com/categories/level_design_tutorials/horror-fear-level-design/part2-survival-horror-level-design-anticipation-pacing.php

A good read indeed since I do 3D as well as 2D games. And I also have did it with my local short 3D horror game(if you understand Indonesian, and want to try it, I'll gladly share it with you)

As for 2D games, I think the atmosphere will mostly affected by lightning and shadowing(as stated before). Being in the darkroom with only a flashlight in hand(or maybe a candle), will sorely limit player's vision and make them ask them self what else 'being' exist in the same room with them.

That's what I like from flixel, before I know flixel, I have to create my own tile map renderer and it wasnt too fast(in fact , it slow as heck), beside, the fact that flixel render everything in to a single screensized bitmap make it easy to create a post process effects.
It has weakness though, when you want to create a very big tiled map(like a whole 'world'). It well eat the memory like heck, so I still have to make my own tile mapper 

Found a way to remove the ugly reverse projection.

Looks like a cartoonized battle ground in FF IX to me

Ever played Ishar games? In Ishar2 and Ishar 3, the city took a whole island, and only few house can be entered

Just some addidtion, even on japanese games, the text running left to right(like in JRPGs). But I guess most player will have difficulties playing right to left scroller.

The concept is good, but I dont know what is wrong, the frame rate looks bad(in the video at least) Maybe decreasing the view range and hide the visible border with fog will fix it.
Yes, I agree about the gameplay over graphic but from the video, I cant find the gameplay, will it be like GTA free styled game or will it be Final Fantasy epic styled game?
Since there arent many player playing, how about adding some NPC or maybe bots to spice up the game?

Nothing Right now 

I've been making game since... along time ago(I forgot 'when' actually) but I started making games with Turbo Pascal 7 and Turbo C 3.(yes, that long)
Since then I stumbled across into many Game Dev Tool from DIV GameStudio, Gamemaker, 3D Game Studio, Unity 3D, and rightnow I do AS3 with flixel(Using FlashDevelop, I have no intention on spending my money to buy the pricy Adobe Flash CS4). And from my experience, I do feel that using some tool has made my life easier.

Never tried flash punk, so I recommend flixel, got some cool examples for platformer too

Nice Island.
Cant say I like the rivers though, they seem that they not running down from the mountains as you said(I assume that the mountains are the brown patch)

Fraps. The free version can only record 1 minute per recording, but that's more than enough for me.
Cant record flash game though.

I would say go with Flixel and FlashDevelop. If you make something like a cool game, you can sell it to sponsor for a quite big money