Feng Shui is well on its way to a long awated second edition and though I was in on on the playtest I can't share much. I can share that Robin Laws' goals for this game were to make the template system even faster to use, and to even more focus on the preferred campaign frame of the PCs being the new incarnation of the Dragons moving from one butt-kicking site to another.
All well and good - it's his game after all - but when I've run it I've always wanted a slower burn on my conspiracy. There's a lot to be said for "someone shows up to explain the incredibly convoluted chi war and basically anyone not on your team is either an enemy now or will be one later" as a way to get the game moving, but there's also something for both non-chi war games and those where the PCs are slowly inserted in, being courted by multiple sides (perhaps in opposition to one another) and playing with the politics that are inherent to the setting but minimized by the Dragons campaign frame.
One area I want to touch on today is how the malleable history of the chi war gives room for some real horror. To explain, Feng Shui has 4 separate time junctures for action, and acquisitions or losses of Feng Shui sites in an earlier juncture change the downsteam history. Every normal person remembers the new history. the PCs, however, and anyone else who has traveled through the Netherworld (and likely through time) remember their old history unchanged. Eventually most abandon the 'normal world' because their external past changes so often in so many subtle ways that they have no frame of reference - a handy device for removing the complex interpersonal relations that are secondary to the Dragons frame.
That historical malleability, however, is a fertile ground for horror. I got some good mileage out of events in my 1001 New York Nights campaign - the PCs were top officers in a NYC 'flying squad' sent out to handle rough cases - not just in how the conspiracy was roping them in, but how the conspiracy was altering their pasts to make them more amenable to joining, or how once they had unwittingly entered the netherworld they started sliding out of sync with the rest of the squads remembered reality. I could easily ramp this up to 11 and make the game about both butt kicking action and the disintegration of ones history, the sort of trade off that powers horror gaming like Call of Cthulhu.
Imagine if you will the PCs entering the Netherworld without realizing it, returning home and finding over the next few sessions their case files change, their jobs change, their friends and enemies shifting roles and so on as the world alters around them. That's room for horror. And I expect I'll come back to that even after Feng Shui 2 comes out.