Well, I downloaded and played it, and it is nice! I've got some impressions below. WARNING: THE REST OF THIS POST IS ONE BIG, BIG SPOILER. LOOK AWAY... NOW!
Gameplay: Overall, I thought that the Black Hill Caves gameplay was better: the enemies seemed more realistic (as opposed to sometimes just standing there) although this may have been because, in the narrow caves, there wasn't really anywhere to go. I think the choice to allow you to pick up enemies' weapons was a good one. Also, enemy health seemed to be lowered in Tale 2: the shotgun and pistol seemed to do less damage in Tale 1. Again, I prefer the advances made in Tale 2. There were also some more serious slowdown problems in this episode: sometimes I just aimed upwards to speed up the game so I could walk down a corridor. This was lessened by Tale 2, however. Again, I think you should make the revolver more powerful, and make the Colt 1911 clip bigger. (I think it has 8 or 9 bullets in real life.)
Sound: The sound volumes were much improved: I could hear everything perfectly. I didn't like the main character's voice at first, as he wasn't as hard-boiled as most other heroes, but towards the end it seemed more realistc, with his "what the bloody hell was that?!" and so on. Scripted sounds like glass breaking in the mansion added to the experience immensely!
Atmosphere: This was just spot on. The mansion was creepy, the blood in the bath was unnerving but left room for doubt, the sounds were excellent and tense, the fact that the door was open and the food was gone off... all these pointed to the fact that something was wrong, without actually splattering brains on the wall and making you say, "oh, I'm not scared any more: It's just blood!" The graffiti was well-placed and suitably Lovecraftian. When I first entered the Library I went "ooh!" and when I crept round the sofas and saw, to my horror, the corpse... well, that was an "oh no, no, oh dear..." moment (which in my opinion is far more interesting than a broken-glass freak out moment). The Otherworld, though brief, was good, especially the whispers in the background. I notice the Otherworld moments are getting longer: I hope that they continue to lengthen, until they are fully explained (in all their cosmic horror, naturally)

and we have Otherworld mazes or mini-quests or perhaps even fend off Star Spawn or Mi-Go while trying to escape!
Bugs: There were a few. I lost health at unusual locations sometimes, there were the slowdowns, and I got stuck to the wall of the study on my first play and had to restart.
Finally, I'm not sure whether I've actually finished it: I got to the part when there's an explosion, I turn a corner and see flames ahead so go through a side-door, then there's a room that's on fire and I don't think I can jump across. But I try anyway, or I try and drop down and I die.
Also, I don't like the lives thing, although I realise this is a FPSC issue. I prefer the more mainstream method of "you die and you restart this section" with the enemies being replaced where they started etc. but I don't know if this is possible. You could just give the player 99999 lives, but then the enemies would stay dead if you died...
But overall, a good game. The gameplay was improved with Tale 2, but the atmosphere, once again, is unmistakably Lovecraftian.
EDIT: Ooh.. just realised how looong this post is... sorry...
3D game making is a combination of pc crashes, yelling and coffee.
I'm not actually a Kiwi, I just randomly thought it up one day.