To be honest, I wouldn't say I was sold on the rules. I think it's the situation that propels the game. All the characters are built with conflicting interests so trouble is inevitable.

As far as why it turned out so good, I do think it's because after Cy said at the beginning "hey, none of these characters seem very sympathetic except the Princess," eventually everyone embraced their characters and did make them sympathetic (again, except the Earl, but that worked because he got to be the villain of the piece). Like Jamie said: "Everyone else was just making the best of a bad situation and staying true to what they believed in." Except the situation didn't let anyone just sit back and be conservative, so they had to do more and more drastic things to prevent disaster.

(A recording would only ruin the mystique, because you'd hear all the not-so-sexy "No! Do It Differently!" "No way I'm doing that!" "Ick!" "That's a terrible idea! I'm never gaming with you guys again! Waaaaaaahhhhhh!" moments along the way. Which leads me to the observation (there's always a moral) that good games aren't about always agreeing, because that's impossible, they're about working past disagreement towards fun.)

(A recording would only ruin the mystique, because you'd hear all the not-so-sexy "No! Do It Differently!" "No way I'm doing that!" "Ick!" "That's a terrible idea!...)

Soooo... there were ideas that were so shocking and terrible that incest became the compromise? I will argue that this is exactly why we need recordings.

Heh, no, nobody balked at the incest, though by the rules any player could have vetoed it (and what does that say about us...)

But there were all sorts of suggestions or actions during the game that were vetoed, not necessarily because they were shocking, but just because someone didn't like them, or had a different idea they liked more. All pretty normal stuff.

By the rules, play can turn into a lot of informal haggling to decide what is true and what isn't. The plus is that everyone gets to have input on everything, but the con is that everyone gets to have input on everything ;). The players are doing a lot of work to sort it out. So all in all, the scenario is great, but I wouldn't say the rules are the holy grail.

As my memories of the evening get fuzzier I become more and more convinced that it was the awesomest session evar, the one to beat. (Good thing we didn't record it, let me have my rose-colored memories.)

On mashing-up with Fiasco:

One could always use the ritual phrases from other games in Fiasco - they wouldn't be contractually binding, but some "Yes, but only if...", "Can you do it differently?", "More detail, please", "To clarify...", "Can I interject..." would definitely let the other players know where you're coming from.
When we played Venetian Tragedy the week before, the Archipelago Resolution cards inspired a couple really great fictional moments. I don't remember the cards doing anything particularly awesome for us with Seid, though, so I don't know if they'd be a good replacement for white-stone/black-stone in Fiasco or not...