We are currently investigating reimplementing the 'Tinsel' engine, as used by Discworld 1 and 2.
Ender is organizing this.
Status
The rights situation has been resolved, and Terry Pratchett and his agent Colin Smythe have approved the source release and future freeware re-issuing of the game.
We are currently awaiting receipt of the engine source code.
Update
Around 11th October 2005 we learned that the source code has been successfully located and started waiting for it to be sorted and sent to us.
As of this update, 9th November 2006, we are STILL awaiting delivery of the source code. Other efforts have been launched to locate a second copy of the code in case this keeps dragging on.
Music Enhancement
The ScummVM Music Enhancement Project has worked on Discworld's music. Permission has been given to release this soundtrack. There are three samples available so far.
Summary
In short, we have all the approval needed to move forward with supporting the game and making Discworld freeware. However Discworld is NOT freeware at the moment. It may be in the future, assuming all goes according to plan.
Whether the gamedata release will have a DFSG/OSI compatible license remains to be determined.