Well, with a little bit of looking around you could probably find most of your answers, but I thought I'd help supply a few links to get you going.
I asked a similar question in the x10 board a couple years back, you could read over the responses I got. There are also plenty of other threads where others asked this question that I'm sure you could dig up.
Mine is
here.
Yes ambient music can be included, whether you find some or make some of your own. This can be added both in house through the FPSC global settings where you change the background music, or you can use sound zones with various music scripts provided.
As far as a
large scale project goes, that ends up being sort of subjective. There have been some awesome large scale projects for FPSC done, such as
Eldora by Rolfy, and
Squadron AIU - Dark Storm by Deathcow.
Really, it's as much patience and creativity as you can muster. The engine obviously can't handle a massive studio project like current age AAA games. You're not going to make Skyrim. You could make something large, multi-leveled and brimming with an engaging plot, the whole nine yards, if you really wanted to though. It would take a lot of work on your end however, determination and learning how to model, texture, animate, and exploring the limitations and capabilities you have with FPSC. It's not going to happen over the winter holidays or something. But can never be ruled out!
For overlays, I'd probably check out Doomsters new
Model Maker 2.0.7 as it says it supports overlay creation. I think that's what you're looking for, I might be wrong.
Xplosys'
OverLaze may be more to your liking.
And for scripting in FPSC, you'll want to take a look at Plystire's thread
here, and the Official Community Guide which can be found listed
here.
Good luck with your projects!
Life would be much easier if I had the source code.