We've ported the xbox version of Shenmue II so yes it does have stencil shadows.

It is probably too much to ask, but I would love if you were able to take the best of both versions and combine. The Dreamcast one has more textures and geometry in places ... Little details like more street signs and stuff make the Dreamcast version the better looking one to me.

Here you can see good examples of stuff just missing or having reduced detail on Xbox.
http://shenmuedojo.net/new/extras/s2xboxvsdreamcast.html

Especially things like the radiators basically being glitched into the mesh they should be sitting on would be a shame to have implemented like that.

Not to mention the overbearing heavy bloom.

darksniper wrote:If possible it would be cool to stretch to 16:9

Now stretching to 16:9 would be pretty much the worst thing that could happen with these ports. ^^ Or any 4:3 games for that matter. But luckily that is already clear to not be the case.