Linearity is a fickle subject for RPG games.
On the one hand, linearity allows for a good story that is not influenced by the player. If you have a plot twist, there is a garuntee that the player will experience it. However if you give the player a choice whether or not to do something, they may never experience that twist at all.
A good game today will balance linearity and choice. Recent RPG's such as Mass Effect or the KotOR series have had a unfying story with some levels of choice allowed. Yet you still had that feeling that no matter what you said, the same thing would happen anyway, you simply got awarded different color points.
True choice games are on the horizon however. Alpha Protocol looks very promising, with choice affecting further down the story instead of the present. Games such as The Elder Scrolls: Oblivion have had quite a degree of choice while still presenting a linear story. The game just gives you a little push in direction of the main story, but otherwise leaves you alone. This style sets itself apart from the morally heavy BioWare style of games.
With the morally heavy games (for lack of a better terms), there is a storyline that is central to the story. While side exploring is often encouraged, the main story is still centerpiece to the game.
With a true open world such as Oblivion, you can do as much or as little as you please. Unlike having an active moral meter, some factions are evil, some are neutral, and some, like the main story, are generally good. Arguably this provides a more realistic moral view of the world, since no one is truly good or truly evil.
Yet, true open world games still have linearity in them. All games have linearity, to some degree or another. Some of the choice is more staggered, like Grand Theft Auto, which opens missions storylines as you progress through the game.
Games like Oblivion are even more linear than most MMORPG's, which require a progressing system that opens up more and more choice.
Anyways, in a lame conclusion, I hope to see more games with an open world such as Oblivion, which still combined good story to each storyline.