For each of the Races in the game the AI generates 3 or 4 previous ancestors. Characters own a house with portraits scattered throughout. Examining a portrait gives you the randomly generated background for each ancestor and how/aproxhowdeep they died trying to recover a lost family heirloom in the "bottomless caves outside of town".
Characters have a basic town (moria style) to equip and trade in. If character dies (which they should, since it should be crazy hard) on quest attempt then the next time a player chooses that race they should be a descendant of the previous character, and another potrait should be added to the home with the previous characters info.
Ancestor levels should be similar to Nethack except there can be variations based on the aligment of the previous character. If previous character was good, perhaps the spirits interaction with the ancestor is enough to release it. Leaving uncursed booty. If the previous character was neutral perhaps a randomly generated quest will release it's spirit. Leaving mixed cursed/uncursed items. But if the previous character was evil then perhaps combat is all that can set the spirit free. Leaving cursed items behind.
Obviously you would have to set limits for the number of ancestor levels that could be saved. Perhaps the last half dozen for each race plus the four originals for a total of ten. As the ghosts are beaten, released, or pushed. The portraits could be removed and their names permanently entered into the family geneology book, also located in the house. If all ancestors for a particular race are dispatched then 4 new randomly generated ancestors can be added at the top of geneology. So player characters follow the ancestry down, whereas computer generated get added at the top.
Other than that, throw in a kick ass batch of skills, monsters, items, magic system, etc, and you'd have a pretty cool roguelike.
Anybody with skills for progamming for the xbox360 want to work on this with me? Dungeon Adventure has inspired me to give that console the roguelike it deserves.
Resume on request. I've some commercial software to my name.