Ok, let me elaborate a little. Both the new SceneEdit and support for DirectX effect files (aka shaders support) are features that need to be done, and I'd like to see both in WME 1.9 (perhaps ending the whole WME 1.x series). But both of these are potentially quite time consuming and may take a long time to finish.
Shaders support would be nice for some additional eye candy (and perhaps some more stuff, depending on how deep would the implementation go). SceneEdit rewrite would bring better user-friendliness for scene design (i.e. the area where developers probably spend most of their time), but mainly it would open door for new features, such as the mentioned direct Theora integration, direct placement of external entities/actors/3D actors, more comprehensive camera tweaking, the "shadow maps" (simply an image which tells the color of an actor in a given point in scene, think more advanced decoration regions), predefined scene states, and more.
So to recap, I want to do both of these, but some has to take priority for now, because my time&resources are not limitless.
While I'm at it, and as I mentioned the end of 1.x series above, some people were asking for a WME development roadmap. Well, I don't have a roadmap, and I tend to change my mind frequently (I know it's unprofessional, but please allow me this luxury at least for my pet hobby project, I have enough roadmaps and deadlines in my daily job). I can give you a rough outline of things to come:
WME 2.0 - completely replaced renderer (based on some 3rd party middleware); completely replaced script compiler/interpreter (I already have a lot of this done, but I can't merge it with WME 1.x because it will not be 100% compatible)
WME 3.0 - complet redesign of the engine/tools; I have many cool ideas, but I'm not going to talk about them just yet
We were even discussing the possibility of skipping WME 2.0 completely and going directly for "the new thing"(tm). Nothing is set in stone yet.
And contrary to what certain AGS users think, I AM listening to the userbase, and I AM interested in your opinions. So if you have something to say, say it now. Whew.