Jeanette, Thornton and I have been having a multi-direction, multi-media discussion about art direction this evening.
We've added in some background artwork, in a very watercolour stylee. All the artwork we're doing is originally hand-drawn, but foreground interactive elements are outlined and tidied up in Photoshop. The background artwork has just been painted, scanned, and plonked into the game.
The result is two distinct styles. From a gameplay point of view this was a deliberate choice in order to make interactive elements stand out. This does mean that the two styles are very obvious, and it draws attention to the fact that such a choice has been made.
Trying to synergise (can you tell I was a middle-manager?) the two styles would be the route to go if we were putting emphasis on creating a coherent and cohesive 'reality', such as in a big-budget game like Halo 3. That doesn't try to be realistic (very far from it, especially when compared to something like the original Gears Of War) but instead aims for one universal art direction and style that pervades all visual assets.
Using a variety of effects and styles, we've already started down the route of highlighting the art direction as a means unto itself. "It's drawn on paper! We use pencils and paints!" This is reflected in the menus, UI elements and title screen. Hopefully by turning our budgetary limitations into overt declarations of style, we can be more true to our status and also deliver a game that oozes charm.