This is a great article showing where the potential is. The tricky part about realizing that potential is that there isn't market (i.e. $$$) demand for client-side, hackable hypermedia right now. As much as I would love to see SMIL take off (I was on the working group), we've got a bit of a chicken-and-egg problem getting this bootstrapped. Someone has to do the work of coding this stuff up, and no one has figured out how to get paid doing it.
The good news is that practically all portions of of the RealPlayer technology referenced in your article are open source, including SMIL, RealText, our HTTP implementation, our client core that allows for new open source plugins. We would love to see someone build the technology you are looking for. For example, someone could conceivably turn the Gecko HTML renderer into a RealText-replacement technology. Or, for that matter, an incremental approach would be to enhance RealText to add the features you feel are missing.
Check out the Datatype project at Helix Community for more:
...or send email to firstname.lastname@example.org to get the conversation rolling.
Development Support Manager