As promised, here are a couple of examples of web-based fiction. It's usually called hyperfiction or hypertext-fiction, a google search will bring up a lot on the theories. Hyperizons has some criticism and theory that's pretty academic, but it can give you a little bit of an idea of what it is.
One of the best I've seen is My Body by author and illustrator Shelley Jackson. It makes pretty good use of pictures and text, and the story itself is pretty unique.
8 Minutes by Martha Conway takes a different tact. Instead of navigating through different links, the page updates itself every few seconds. It takes, you guessed it, eight minutes to run through to completion.
Lady Litblitz posted yesterday about an article on computer generated writing. I haven't found the main one in my notes yet, but I found this, this, and this for a few odd but fun sites on it. A lot of programs for Macs out there for doing this (go Macintosh) and few for PC and Linux. Of course a lot of web-based ones as well. Most are pretty randomized, but I'll look through and see if any are particularly clever.
Now Forty Two has nothing to do with Hyperfiction or computers. I just thought it looked pretty cool. They're all book reviews running forty-two words in length. Kind of a fun experiment. I may work on something and send it there for the heck of it.