Bearilou, the things that Engineertiger and Gilead envision above are almost the exact same things that, as Medievalist pointed out, were being discussed way back in 1994 (and even before that). That is, almost 18 years ago.
The idea that you can click on this link and it will play this video, or click on that link and it will play this music within the text of a book is not new by any stretch. Interactive games have been using it for years as well.
The actual practice, where it all comes together in a seamless manner and music plays on cue, video pops up without delay, and everything comes together to form a virtual stage play in a book has not yet, IMO, been accomplished.
I think what some people are looking for is virtual reality in book form rather than the experience of the book itself. You 'walk' through the book, looking at the scenes, watching characters interact with each other, hearing and watching and viscerally trying to experience the sights and sounds of the characters rather than reading the text.
In other words, a holo deck experience without the holo deck interaction.
Personally, I think this would be boring, but that's just me.
The idea has been around for almost 20 years or more. It's not new. Virtual reality has come a long way, but there's no way I'm going to prefer walking through the woods in VR with Davy Crockett fighting Indians to reading about it in his biography.
Even the Wii with its supposed underwater and woods explorer programs don't come close to full- immersion VR or even the type of immersive interaction that MMORPGs are capable of these days and MMORPGs are light years ahead if interactive books.