So far I’m making great progress in unity. The world is procedurally generated via cellular automata so you get some neat little islands. Also the villager finds his way around using A* to trees and gathers wood. Once he has enough wood he will build a house and then you’ll have another villager!!! (not yet implemented!)
It’s really fun watching the little guy work…

You can also click ocean tiles to terraform them into land. Eventually this will be based off tribute points which you will receive from your villagers every few seconds.
if anyone wants to give it a try :

http://dl.dropbox.com/u/1394227/LD48/WebPlayer.html