As a composer/audio engineer, I feel that fully adaptive music, although amazing and possible, sounds too much when integrated within the game all the time.
If you watch movies you will see that music is not apparent all the way through, its the use of both music and audio (and its effects).
The skill is using it sparingly but still being interactive, this can easily be done on 'DirectMusic' using triggers and some classical music techniques.
I feel that more interaction between on screen visuals and audio (not just music) is the way forward.
Bioshock is a good example, It scares the s**t out of me some times, the enhancement of voices and other elements through EQ and reverb etc, using subtle changes (like in real life) really works for me. And is far more realistic, tricking your mind into a false sense of reality (Isn't this what games are created for)