I'm worried about layout here mostly. Should the fluff come first, and then the crunch second, or vice versa? Perhaps the two should be interspaced - say notes about the characters and technology first, then character creation, followed by notes about society, then the combat rules etc.
One of my projects features a continuous story of a character talking to the reader, with rules and so forth as either parenthetical remarks, side bars, or pulled out sections (ie gray background italics between two paragraphs) However, this has been quite on and off since I'm not sure if it would word.
As a second concern - how closely should the story and mechanics intertwine. Is story there to illustrate the mythology of the world, or is it grounded in what characters are really capable of?
Wether one should have the fluff writen, then adapt rules to it, or adapt story to system is more of a left/right brain thing I think. Then again, I seem to have started with mechanics ideas first a number of times, despite being a very right brained individual.