I would like to start by saying I have enjoyed playing Indigo Prophecy very much. I tells a pretty complex story that reads like a crime drama despite its supernatural overtones. The characters are believable, each possessing a back-story and their own arsenal of hopes, fears, and goals.
As far as the claims of being a groundbreaking new form of storytelling, I have to disagree. It is indeed one of the better stories found in a videogame. It also has multiple endings based on your actions throughout the game. Choices made decide who lives, who dies, and what happens to the world. But can they developers claim that this is a complex branching storyline? The answer is no. The player is frequently given a choice of which character to play as for a time but for the story to progress you have to play as all of them. While the endings and how many main characters are still among the living by the end differ, the overarching story remains the same.
Like I said, this isn't really a bad thing. The story is great, but I doubt it would make me want to play through again just to see if I can experience something slightly different. If you want to tantalize the completionists out there then you need to tempt them with more. Maybe experiencing the game through a new fourth character (the bad guy maybe?) or giving the main players goofy abilities or skins (a la Silent Hill). All in all this was a very good game who story and "action sequences" influenced many games we play today. A great game that really only suffered from overzealous marketing.