"Racter", short for "raconteur", is an Eliza-like program designed to tell stories.  See http://www.mobygames.com/game/sheet/gameId=563.

For a skeptical view of Racter's famous work, ''The Policeman's Beard is Half Constructed'', see http://www.robotwisdom.com/ai/racterfaq.html.

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I read about that, too.  Seems it was never ready for prime time.  It could substitute words in a poetic (read random) way from a thesaurus in sentence templates, but it never really "understood" what it was talking about.  The funniest parts were the random interjections.