Or will the games controls still be the same as they've always been? I couldn't seem to find much if any reference to controls elsewhere.

What do you mean by modernise?

I mean just that. Daggerfall's controls were not exactly amazing even after reconfiguring them. The chocies were somewhat limited. You could get it relavtively close to the same sorts of controls as you found in the likes of Morrowind and Oblivion but you couldn't quite do it, also magic use in Daggerfall was a bit clunky to say the least. Would this new engine allow such control modifications and ease of use of magic?

Edit:

One thing that would help would be if the controls would support more than just a 2 button mouse.

Now, this may be reaching a bit far but what would be great would be if you could set say 5 spells to a hotbar of sorts. Using the scroll wheel on a mouse you could select which spell you want keyed up and then you can fire the spell with the press of 1 button (I personally like the thumb button on the mouse, but that's kinda part of why I'd like support for more than just 2 button mouse controls)

That is a great idea, you only need to play Duke Nukem with High Resolution Pack and feel the controls...
Daggerfall was ready to play with mouse when it was released? I mean, look arround with the mouse and all the things.

Some of the controls are modernized - it defaults to the "view" mode (mouse look instead of keyboard turning), additional mouse buttons and keys are supported. However the original interface is still used for things like spells/items/etc. But there are more options that can be made available once the base gameplay is complete.

That's absolutely fantastic to hear lucius, thanks.

I'd like to use a Xbox 360 controller at some point (in addition to using the keyboard for typing stuff).

I can't wait to see what's done later on.

I've used a program called pinnacle game profiler to get my gamepad working with programs that don't natively support gamepads. Pretty handy and great configuration options.

Costs $20 though

Gamepad support will come later, post-merger.

"Swinging the mouse" is really the only thing I would like to see go away. Click-to-swing, instead, please.

I guess that ought to be under "feature request", but swinging the mouse was so irritating to me, I never played much of the game.

I would play it through with that (hopefully) simple modification.