Excellent idea, especially about integrating the iTunes library rather than importing it. If at all possible, full screen cover flow mode would make an excellent addition as well.
As for screen dimming,
Bugbyte wrote an excellent script to do this, by using a freeware app called Shades. Maybe this work can be incorporated too?
I can't code to save my life (and my programming professors from college will back that up), so I can't contribute any of this myself, but I like the idea of this proposed development fork!