Making the collision work was not exactly trivial but it is a lot easier now that voxels are passed to the CPU and meshed. It looks at all the voxels within a given cell and determines (based on a given threshold) whether or not that cell is mostly solid, air, water, etc. More granular collisions can be done in screenspace, but this is necessary for offscreen or hidden collision testing. This coming week I will be working on camera movement (following an NPC or trackballing around it), in addition to registering collision and behaving accordingly (i.e. climbing stairs automatically if you collide with a step, etc). I will also try to work on managing movement and collision when other NPCs are present.
Also, David Sahlin, who I have known for almost a decade (since I worked on Genesis) sent me his ideas for a mod for VQ, drawing inspiration from the likes of Pokemon, Spore, etc - I think it is a pretty interesting idea and I would love to see someone make a mod like this: