This makes me remember my days playing Daggerfall. Enemies didn't get a damage bonus while sneaking... but human enemies, since they had no sounds attached to them, and since there was no battle music to warn you, would, if you weren't careful, hit you from behind without you expecting it from time to time. The claustrophobic paranoia of Daggerfall's dungeons was simply delicious.

The way I would implement sneak would be twofold. First off, sneaky enemies would attempt to approach from outside your line of sight. Second, the "sneak check" would determine whether or not BATTLE MUSIC activated. If the "die roll" was successful, they could approach you with hostile intent, without triggering battle music to warn you. Battle music would not activate until after you had "officially" noticed them (which, obviously, would include striking them with a weapon or spell), which would be determined the same way for you as for an NPC you are attempting to sneak up on.

I don't like the idea of "chameleon" effects for sneaking characters; that feels like a cop-out. Just shut down battle music. That's enough for me.

As to the problem of stealth being annoyingly common... just don't make it so. If you enter a dungeon known to contain such enemies, you should be ready for it. If you're at a point in a quest line where an assassin is after you, you should be ready for it. If you're just traveling down the road, you shouldn't have to worry about being sniped; most robbers are not also murderers. However, if I'm traveling through a particularly dark, dangerous wilderness, my response to having my character suddenly die, and seeing that it was a mountain lion suddenly dropping out of a tree that did it, would not be "damn it!" but rather, "holy crap, that was awesome!" And then calmly reload, and keep my eyes open better.

Take the scenario you just used for example: you're walking around in the woods at night and all the sudden an exclamation mark appears in your UI and creepy, tension filled music starts playing. This is your first warning that someone is on to you but you haven't detected them yet. Acknowledging the danger, you cast either a shield spell, detect life spell, or regenerate health.

Would be awesome but with the tech we have right now I don't think we can make bots smart enough to sneak and use stealth. Or atleast they won't use it well.

I personally like what I've suggested http://www.gamesas.com/index.php?/topic/1195197-real-darkness/. Merely let shadows work properly. Have sneaking NPC's seek out dark spots. No need for chameleon, just make them dress appropriatly. No stealthy assassin would wear glass armour.

IMMERSION LEVELS
- Three levels of immersion (Basic, Advanced, hardcoe)

BASIC features include:
- Changing the base sneak/detection value
- Extending the Sneak attack multipliers all the way through Master level.
- Option where holding a lit torch cancels out invisibility spells/effects on the player.
- Setting the light level offset that affects how much light is considered to be hitting the player.
- Scaling how fast you can move while sneaking depending on your Sneak mastery.

ADVANCED features include all Basic features plus:
- Adjusting in Combat penalties
- Adjusting the max detection distance range
- Adjusting light/sound penalty multipliers
- Adjusting no LOS penalties
- Adjusting Running sound penalties
- Adjusting Sneak Detection minimums

hardcoe features include all Advanced features plus:
- Light not only affects the player, but also the detector.
- Torches held by NPCs will cancel any invisibility effects on them if same option selected for player.
- Better sleeping target bonus in exchange for turning off auto-move.
- Scaled base sound penalty that adjusts to skill mastery levels in Sneak and Acrobatics.
- Significant bump to be spotted if detector has line of sight, and comes within very close range.
- If you have been noticed, detectors get a boost to keep tracking you.
- NPCs that are talking or are in the midst of dialogue get penalties to detect you.
- Silence spells cast on the player nullify all sound penalties for the duration of the spell.
- Penalties are applied if you are moving and are within line of sight.
- Boost to sneak skill development for successful marksman undetected missile sneak attacks.
- Modified ranges within which you can gain skillup points.
- Completely replaced movement sound detection system based on:
> gear equipped, type of gear (clothing, light armor, heavy armor), and which slot (legs, feet, etc.)
> whether you have a weapon out or not, and the type of weapon
> whether or not your weapon is out, shield is out, etc.
> how you are moving (walking, running, jumping, swimming)
> if standing still, whether or not you are turning in place.
- Bonuses to be detected for holding a lit torch or having a LIGHT magic effect
- Optional exponential lighting curve bonus, making it very difficult to sneak in bright lighting conditions
- Swap out visual refraction for Chameleon effect with transparent alpha shader.
- NPCs that sneak become more transparent until they disappear, depending on your ability to detect them and their disposition towards you.
- Adjustments for peripheral vision, with options to make exceptions for creatures and/or Argonians

hardcoe with AV UNCAPPER OBSE plug-in features include:
- no limit to the detector's temporary Sneak Skill level for the purpose of detection
- diminishing returns that prevent Blindness and Chameleon from ever reaching 100% in actual effectiveness.
NOTE: SDR is not very challenging without AV Uncapper installed. So I highly recommend installing it.

START of BATTLE MUSIC
- you must be aware of an enemy. battle music won't warn you about enemies that you can't see yet unless you get hit.
- VoyeurMode: combat is also detected if player is not engaged in a battle that is happening near.
- rats (and very weak enemies) don't trigger battle music at all, unless they hit the player or the player has low health. more then 3 rats will trigger combat music though.

END of BATTLE MUSIC
- ... when you THINK (or don't know if) combat is over. again the battle music won't warn you about further enemies waiting for you in the dark and you will never know if the battle is really over!
- when you are chased by an enemy that is far enough behind you that you can't hear him. you will never know if he is still behind you!
- music fades out slowly while some adrenaline heartbeat and breath sounds calm down... (depending on combat duration. short combat = short fade out, no heartbeat)
- silence after combat (few seconds) before happy explore flute music restarts