Dynamic lighting and weather correct? There was debate on gaf *mostly from a troll it appeared* that the shadows were baked but you can clearly tell in the one shot of the streets how the shadow changes over the tall alien as he walks.
Also, how did they manage the grass detail over such a large world? Is it sprite based? and is this different then what Zelda U is doing for foliage/grass?
Yeah, you could tell the environment/sky light was dynamic since day 1, but its improved considerably in the latest build.
The grass looks similar to xenoblades system, which was a mix of several things, texture put over a single transparent triangle/quad with the value of the rotational axis set to always face the camera, along with some that were only done with the horizontal axis (so if you elevated the camera they would respond correctly to vertical foreshortening but the horizontal rotation would still face the camera) and modeled fauna. Intanced hundreds of times (many more for x).
Zeldas grass appears to be a fully modeled blade, with a decent amount of articulation points, most likely with models of decreasing complexity the further into the distance, independent of camera rotation, instanced thousands upon thousands of times, to fill the environment without the cpu choking on draw calls.