Work on the combat screen continues to proceed at a very fast pace. You can compare this screenshot to the one I posted a few days ago. Players can now move their characters in 8 different directions using the number keypad (or in 4 directions with the arrow keys). Monsters are being rendered, and there are attack actions being taken whenever the program detects a collision between a player icon and a monster icon.
The party versus goblins
That's all I really have for the moment. I think it's kind of exciting.