I don't think Daggerfall, if ported with it's original size, is even technically possible with modern graphics. It would just take SO LONG to develop. Can you imagine creating that much content? It would be like 5 or 6 blu-ray discs.
But damn, it would be the best game ever made.
I think if you were to remake Daggerfall you would need to shrink the continent substantially. In reality it would be no great loss, since most of the wilderness was empty space anyway, but that would still leave hundreds or thousands of tombs, dungeons, caverns, settlements etc etc that need to be done.
But heck, I'd be happy with having the same graphics and everything as long as it had mouselook, a better UI and some other modern controls.
EDIT: OH MY GOODNESS YES. http://xlengine.com/
EDIT: Awwwww it's not an engine conversion. Quests and stuff still don't work. :shakehead: