I have played NiGHTS, and as it satnds the game is perfect. Nevermind the glitches and transparencies cuz the game was pushing the saturn to its limits.
Sega continues to pressure Naka to make a sequel, but like Ian already said, he doesnt want to mess up the original game at all. the best they could do was make a NiGHTS level in Sonic Adventure which was a nice reference by the way and a fun level also.
The other reason why NiGHTS doesnt geta sequel is because Sega is under the mentality that original titles sell betetr than sequels which is why the only games getting seguels are thier top franchises that are proven sellers. Like Sonic and Virtua Fighter. Phantasy Star Online is cool and all but I miss the old style Phantasy Star games, they were so friggin awesome.