Well this is my question concerning that technique... why do you assume that the PC's wouldn't find what you thought up just as (or more) interesting than what they think is happening? Especially if it has the added factor of surprising them? What about "We did something and the result was... totally unexpected"? Another question I have is are you up front with your players about the fact that you will change things behind the scenes? Or is it a case where you keep that fact hidden from them?
I'm up front with the players that I'll adapt to their goals and interests and that they are free to add to the fiction and backstory as they want. This isn't, however, how I tend to run PF games, as I'm experimenting for this one-shot game I'm running. I also don't create new fiction from their rolls, that's they're job, I simply add new complications and challenges based on the results. I'm overall not a fan of DM adjudicates the physics of the world. I think that is done through genre expectations and doesn't need an arbitrator. If it happen to need one, it could be easily decided by the group who's invested in it in equal amounts (In theory, I know plenty of players who don't care and just want to roll dice and hit things.)
Unlike PF APs, when I run homebrew games they tend to be more, here's the end goal (say kill the dragon), but that's all I've got. Are you guys interested in being lowly commoners who rise up over time and fight a dragon (1st level), or are you professional dragon hunters out to slay a dragon (9th level). Either way is fine with him, since I'm only interested in a dragon campaign. How they achieve that or work towards it is up to the group and what their expectations are. Now if the players later decide that the dragon is really just a giant hippo, well then, I've been lied to by the players and there shouldn't be any expectations of continuing. The table needs to have shared expectations with genre constraints. It's how we all manage to run and enjoy games.
I will admit I haven't had a firm table in a couple of years, so I've had to adjust my style based on "new" players, which creates a more shaky game experience until all the players are in sync with exceptions and preferences. Once that's in line, it's much easier to know when something is going to jive with the players or fall flat.
I also think the consistency thing is different with your example because you are still maintaining control over what is or is not canon... the players don't get to decide something is a fact because they rolled high, you decide whether you want to add the changes (based on player assumptions) or not and thus it is still one coherent vision... I think it's a different story when you have 5 to 6 people all able to decide whether something is or is not true based on rolls of the die, especially when these decisions can influence and affect one another. I have no problem adapting to what the players choose to do, but if I decide the king is a demon summoning tyrant, then he is a demon summoning tyrant until the PC's act to change that. IMO, adapting is being able to account for the PC's killing him, redeeming him, allying with him, deceiving him, etc. What I and my players don't want is because a combination of dice were rolled he is no longer a diabolist but instead a benevolent ruler in the service of Bahamut.
I suppose I should have said, "I won't offer any resistance to the players changing the fiction either through die rolls or storytelling." I'll simply create additional complications and challenges for them based on how they're doing and what they seem to enjoy. However, PF has very little to support fiction changing without DM explicit permission outside of a few character abilities and some spells (and even then the rules suggest the DM make the arbitration, as we've talked about in this thread).
Are you against a wizard casting polymorph on the king changing him into a Demon Summoning Chicken, based on the die roll of the saving throw? Is it any different than altering his disposition through the use of die rolls in diplomacy or dominate person? (There aren't many examples in 3x to draw on because it lacks the support that indie players are interested in.) I am, which is why those spells can be troubling. How do I reconcile playing by the rules and not altering them, with mechanics that change my cool story? It's been a headache of mine for a while.
I do understand what you're saying though, the point I think [MENTION=6696971]Manbearcat[/MENTION] was showing from his example though, was that when creating the Demon Summoning Tyrant, you leave it loose and adaptable so that if the players are in a position to face off with the Tyrant, there are things they an leverage when they roll well, that are supported by the mechanics. For instance, if a player rolled well on his sense motive check (insight?) S/he could learn that the Demon Summoning Tyrant had a weakness for kittens and leveraging that could use Diplomacy to have the Demon Summoning Tyrant relent. As opposed to the Tyrant being unchanging and unalterable so that the DM can have the big bad fight s/he wanted, even if the players have clearly expressed a lack of interest in the big bad fight. If the players are interested in the big bad fight, then they wouldn't have attempted to alter the fiction in the first place.
I could be wrong though, I'm a mess when it comes to gaming these days.
I was playing in a PF game a while ago and I was playing an illusionist. Most of the rest of the party was melee damage dealers. During on encounter with a slew of demons riding demons, I managed to get off a spell that all but incapacitated 90% of the demons. The rest of the group was a bit grumpy with me because they were looking forward to a big brawl. I think this is similar to what you're saying about dice rolls changing things and altering expectations. If the group had made it clear that they didn't want me to take spells that could effectively end interesting and melee based combat, then that should have been clear upfront. Which is perfectly fine. The players didn't want a narrative changing game, they wanted something clearly presented without means of altering (in my case, changing the scene from a slug fest with demons to a stroll through the woods on a sunny day).
But again we aren't talking about adapting to the effect that the actions of the PC's have , we are talking about the relevant fiction that has or hasn't been established and the PC's actually being able to create and decide this based on a roll of the dice. I also don't see 3.x/PF as being inherently better or worse for the sort of play you describe than any other edition of D&D. There are set difficulties to extrapolate from and battles need to be customized in any edition to be interesting as well... a single orc in a plain room is a boring battle in all editions of D&D. I honestly think this has much more to do with how familiar you are and how much experience you have with a game, but I could be wrong.
There are no mechanics (aside from spells really) that allow players to create fiction in D&D. I think this is true across the board for D&D, including 4e, which I'll admit I haven't played enough to really be an expert on. However, in AD&D it was never really necessary for me to alter the monsters or adjust skill difficulties, because they were universal (no rules to change monsters and no individuals skills, aside from class abilities), at least in my recollection. This changed a bit in 2e and a lot more in 3e. 4e I believe attempted to make it easier to both adjust monster stats on the fly or use the monsters as is (again, no expert here, but just what I've seen and read).
That said, I have no trouble with the PCs adding fiction to the game if the players describe there actions in a way that introduces new fiction (either through the mechanics of rolling the die or through pure storytelling). In this particular one-shot, their entire background has no limitations and isn't shaped in any way. They could, for instance, decide that their character does know the king or that the entire party did service for him, or that the king is really a queen who had an affair with one the characters (they're playing at 7th level so what happened during those previous 6 levels is up to them). I wouldn't say this is the normal way I play games, but because it's a one-shot there's no campaign issues at play. In the games I've run that haven't locked down player fiction generation, I've usually been quite pleased and entertained by the game. Players tend to limit themselves based on expectations. However, I've seen an equal number of players who aren't interested in shaping the narrative and fiction in any meaningful way, and just want the story to unfold as per-conceived by the DM.