I don't see any way of getting around the bug of challenges becoming statistically more likely to succeed the more 'complex' (and higher exp value) they happened to be.
It didn't /need/ to be, of couse, and IMHO, worked best entirely 'above board,' but it /could/ be used that way if the DM wanted to have players feeling their way through challenges one action declaration at a time rather than approaching it as an engaging 'mini-game.'
Sounds a bit brilliant, actually.
I don't claim to be brilliant of course, but here's the nutshell of what I did:
I streamlined 4e mechanics somewhat, so combat is still tactical and 'fun' but individual combats can respond a bit more to planning and various tactics are more significant (like surprise is a bit nastier, being on higher ground actually helps you, etc.). Powers are little bit more potent as well in the sense that deploying a daily power gets you a little more straightforward decisive results vs maybe in 4e its usually a bit more incremental. This is all just basically moving things a bit quicker in effect. The concepts of synergy and pacing of fights remains intact, as do MOST of the actual mechanical details.
I gave players an explicit 'plot coupon' mechanic that very clearly lets them trade a resource for a chance to interject some sort of narrative element, but it has to leverage an attribute of the character. For this purpose players can specify a few loosely defined 'personal attributes', as well as 4e-like background.
As stated before, all action is part of either a combat or a challenge, so there's always scene-framing explicitly active and a definition in place of goal and forward progress. Players can still define 'quests', but there are no XP in this system, so it actually becomes the equivalent of the 4e 'wish list' concept, a player will define a quest as a mini-goal, like they want to find a magical sword or rescue someone, etc. A boon is normally associated with accomplishing this.
Inversion of advancement. D&D has advancement by 'accumulate treasure and battle experience to gain levels' (4e moves treasure to being a measure of advancement and a resource, but the same paradigm holds). HoML has 'treasure' DEFINE advancement. When you achieve a 'major boon', like say a magical sword, you advance a level. Thus advancement is an effect of setting goals and playing your character. This creates a more natural form of advancement that generally lacks the 'character optimization' element as a major thrust. (IE in 4e you advance, and then you ask "what no gewgaw can I add to my character at this level?" and the natural answer is whatever adds to her numerical and procedural power in the game mechanics. In HoML you find some sort of 'thing' and you become advanced). Players get 4e-like agency here from the previously mentioned quest mechanism, which the GM SHOULD honor (this is Story Now after all).
There are interludes as a 3rd form of play aside from challenge and combat, which allows for simple transitions and non-conflict-related activities to fit into the game. It can also provide for simple information transfer kinds of actions (IE you have a dream, you research some topic, you compose a song, whatever). The GM will (normally SOON) frame a new scene that generates conflict, which will then become the initiation of a new challenge. Interludes are really there to allow the players to 'reset', pick a new quest, and realign their fiction to reflect any changed priorities and relationships. This should put the ball back into the GM's court, and its on to the next scene!
Other specific tweaks to 4e include there is a very different take on rituals and other similar 'procedures'. These are now simply fictional explainers for utilizing different skills to perform checks during challenges and allow for alternate changes to the fictional positioning (or sometimes just color, whether you pick a lock or use Knock produces the same results). Thus ALL 'skill tasks' are either simply straightforward application of a skill, or use of a procedure/ritual. There are powers which have a kind of 'skill association' as well, but they're just powers that require a skill check as their resolution mechanism. Facilitating this I fixed the issues with 4e's numerical engine, so all checks are on equal footing (hitting it with a sword or frightening it with a scary illusion work the same, one uses sword proficiency, one uses Intimidation).