Wired story on episodic gaming, having a new spotlight following Episode 1 for Half Life2; Tune in Next Week for Gaming Fun: "I got that satisfying sense of completion that I often miss in a normal 'big' game, when I realize I'll never have time to play the whole 50 hours, and reluctantly abandon it halfway through." (page 2 direct)
I would compare it to short modules for games like NWN - with many of the best modules splitting up the adventure over several parts. It has all the advantages mentioned in the Wired story - you can adapt from feedback, you reduce risk from spending to long on the wrong concept, you can improve over time and you can have minor characters and plots develop long term.
In short: you can do like the soaps (as Sheldon writes)
The best part about episodic content is the potential for disintermediation - that good old 1999 buzzword - digital distribution will give us global price, rather than inflated local prices. And shorter stories in an established framework are smaller and easier to download than full games, making it less of a 'gamble'.
Now, what remains to be seen is how broad the uptake will be, and if Valve is actually able to keep HL2 growing in a good way.
