Holee crap! Pico 1's art really pales in comparison to that. If you really can get the ingame art to look like I think you might have a killerapp on hand. Even in those screen shots you could really see a monster improvement in both the character and their backgrounds. I hope it's not going to be too much of an endevour cause it looks like it'll be commerical quality when it's done.
I like how you can now move the character freely as I found that lack of freedom a nuisance in the previous game. That being the case it should be very much like a lucasart or one of the old sierra games in terms of gameplay. The gunplay elements shoud add a new depth not seen in those types of games.
I think once this game is done you should consider going a full scale pc commercial game. With the huge rush of 3d games nowadays it would be nice to see some good hardcore 2D games.