The Elder Scrolls IV: Shivering Isles Fan Q&A

The official Elder Scrolls forums have been updated with a new fan interview, in which design director Bruce Nesmith fields quite a few questions about The Elder Scrolls IV: Shivering Isles.
Q: What new features do you plan to add? What of new factions, either joinable or non-joinable? Also, since this is about the realm of Sheogorath, what kind of quirks can we expect?

A: The main quest has the player advancing in the faction of the Court of Madness. You can even attain the rank of Duke of Mania or Dementia. On the Xbox this will unlock new achievements as well.

Many things will be different here. Even going to jail. Criminals are thrown into the bottom of a dungeon. All of their equipment is confiscated. If you can make it out of the dungeon alive, without your stuff, you are free. All your crimes are forgiven. All of your confiscated goods are in a chest right next to the exit, so you do eventually get them back.

New Sheoth has a graveyard. Each citizen that dies gets a tombstone in the graveyard with a fun epitaph.
Most of the creatures have some special ability or interesting weakness. For example, the Grummites heal in the rain. The Gnarl gets larger and tougher if you hit it with fire, frost or shock spells. The Scalon can turn invisible while stalking you.

Heretics and Zealots are similar to the Conjurers and Necromancers of Oblivion. However, if you wear their robes and hoods, they assume you are one of them and do not attack. Be careful though. If you get too close, they realize you are an imposter and attack.