Hussar
Legend
OK YOU as the DM have more time to work on story, but how about your players, and what goes on with/during the game?
How much does storytelling get explained in the books as opposed to the combat? How much of a story can the players tell around the rules as presented? Are they hindered in any way to tell particular stories because of difficulties created by the rules.
Before or after playing, tying some kind of story to what is going to happen, or what happened is not too hard, even if it does pose some problems, but how well are your players able to tell their own characters story through play and during play?
I'm not Mort, but I'll take a stab at this.
I agree that storytelling is, compared to 3e, pretty much the same IME. I can't really compare it to my 2e or 1e days, mostly because it's just so long ago, and mostly because I'm no longer a student with lots and lots of free time to devote to gaming. Heck, back in high school, we'd pull all night gaming sessions. I just can't do that anymore, so, there will be a fair difference there.
Personally, I find that since mechanics have been divorced from flavour, it becomes much easier to bring my character forward than in 3e. In one example, my somewhat insane rogue believes that he is a disciple of Kord and that his wooden spoon was once used by His Mighty Thews to eat from the character's stewpot. To open locks, I simply tap them with the "holy" relic and they pop open. That sort of thing.
Shazman - on in combat role play. I'd say that it depends on my mood to be honest. Sometimes I really try, and sometimes I'm just too lazy. Pretty much the same as always.
However, I have found that I do engage the personality of the character and mesh it with the mechanics to a fairly large degree. The aforementioned rogue, for example, has a life draining dagger - killing an opponent grants 5 temp hit points - so every time the rogue scores a kill, I dedicate it to Kord.
Although, I am running out of adjectives and body parts to dedicate things to.

So, no, I don't think that the mechanics pose any significant limitation on role play.
BTW, for anyone masochistic enough, we have actual audio recordings of our sessions.