Is the game still in development or is Incubus Island the priority now?
II should be priority, and it kind of is, but not in a direct way. I happen to be in the mood to start actually 'planning', which is a mood you'll rarely find me in, so you're going to get a rather long response to what I'm sure you intended as a yes/no question.
Right now I'm working on II's interface/conversation system, but I'm using IC as the testing bed for it. It's much easier to test something out when you have a load of different circumstances to test it under, and all the scenarios for IC really provides those.
In doing this, I am also adding new paths and options to already-existing scenes in IC; in part to test the system, but also often on a whim because the system makes it much easier to add shit in. Once I'm satisfied with that, I'll release that version of IC and then actually start building II.
Once I've started building II, I will not be doing much on IC, except bug fixes, things relating to mods and implementing scenarios other people have made. I won't be done with IC, I just won't be producing new content for it until I have something playable for II to show. (At the very least, there will be content relating to II in IC.)
I originally planned to do an intermediate game that would have been a hentai fantasy RPG, in order to test out my RPG systems, but I realize now that II might be a better venue for testing those out. Also, I started getting some really great ideas for the story and world this fantasy game would have been set in, and it all would have been wasted if I just used it on some little side project. Definitely plan on revisiting it in a much bigger way. (It was going to be titled Just Rape Pretty Girls, I mentioned it in this thread previously. Probably won't keep the name.)
Anyway, a week or two I'll have IC v1.8 out... or maybe I'll call it v2.0... and then it's on to start piecing II together.