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1) How good is Horde3D for trying out procedural generation? I would like to use it to draw a stickman and create walking skeletal animation for that stickman, all from code. Also experimenting with custom built shaders. Is Horde3D right for me?
2) How well it plays with other languages? As you can see, my C++ skills are rusty so I would prefer something else. I notice that it has alternate interface built in C, so creating bindings for other languages should not be a problem (assuming interface is up to date.) Has anyone tried creating SWIG Interface file?
3) For objects that aren't procedurally generated, does Horde3D work well with Blender?
4) Will development of the engine continue? Please don't get it wrong but judging by activity here it kinda looks like a semi-abandoned project. Which would be a shame, really, since I think that the world definitely needs lightweight graphic engine. Most are just too bloated, in my opinion.
1) Horde3D accels very well in a data-driven way, you load in .scene.xml/.geo generated from a package and it just works, provided the data is correct. Having said that, the accompanying library Horde3DUtils has functions to produce procedural content for geometry and textures, and there's low-level access to buffers using the map stream API which gives you a pointer to the vertex data so you can iterate a loop over the values to change them in your procedural function. If this isn't flexible enough, there's an extensions mechanism which allows you to create your own formats or procedural approaches and a way to make your own function pointer which is a callback to the rendering system to render it how you want, and the terrain extension is a perfect example that you could adapt to your own, provided that you're proficient at C++ though...
2) Horde has a really good C-API which like you said, makes it easy to wrap to any language. In the alternative repository there's many many bindings however they often lag behind the API changes of the sourceforge releases.
http://horde3d.org/wiki/index.php5?title=Community_Branch3) I believe Blender now exports correctly formatted collada formats that the ColladaConverter can convert to Horde's native formats. If you want to go back to v2.49b of blender there's a python script which exported to Horde, but I don't know if that has been maintained for the latest Blender as the collada pipeline is preferred.
4) Development is slow due to the core team being employed
but there has been updates here and there, the next big step is to take out the scenegraph and make it a reference external utility so that the rendering engine is purely submission-based and to have model joints cache-aligned for a speed-up in animation updates. There are also external developments, I'm slowly porting it to ES 2.0 and fine-tune it for NaCL/Android/iOS and support more texture formats. It isn't abandoned though, and there's a university using it for student projects.
Hope this answers your questions.