Quote: "I would say nowadays it's even easier just to have the cutscenes take place in the game engine. You can setup nice camera angles and have your scenes take place inside the game itself, with all the models. Just make it play out like you would any animation in your game, and you can try different things like removing player control, adding widescreen borders, etc. "
I definitely agree with this. I think that it gives you the opportunity to be seamless in your transitions, too (Final Fantasy X is a good example of shifting from regular moving around the screen into another event, be it battle or a cinema, seamlessly). If the game stops to go to a movie, I think it is a little less immersive. Depends on the results that you want and your priorities for those results, though.
Your error is my treasure. =^--^=