As an offical member of the remake, I'll tell you two things...
First off, Darkness is totally right, if you want the latest info, visit the website. (see Fice for details.) Since I JUST now got out of my final class (I gotta wait for an "exit interview" cause I'm taking the next term off) I might do some work on creating a new website design...
Second: We are still working on developing a story, although he do have all the major plot points roughed out. As for the engine side of the remake, Fice has done some amazing work with it. I myself have recently been developing a program to write the "field" files used by Fice's engine. Meanwhile (I haven't heard much about this in a while...) Alhexx has been working on improving his modeling program. Hoepfully soon he and Fice will get together and build me a model/animation export plugin type thing for Lightwave so we can get new and original models into the engine.
The one thing I'm really going to point out is the fact that until today all if not most of us have been dealing with school work and finals, not leaving us a lot of time to work on the remake.
I hope this answers your questions.
Sephiroth 3D @ school