I love it. I don't know why there is any discussion of whether it is a dungeon or not, it doesn't really matter as far as I am concerned. All a dungeon consists of is a series of encounters based on a premise in a semi-enclosed area. Check check check. The scenes are fabulous, the creature is awesome and this is definately a fantastic game-ender with some unique aspects.
I am also of the mind that there should be some sort of contest as to the spell snatching. Additionally, if it uses spells like a scroll is the page of the book consumed as well once it is re-cast? If the lesser item is fairly common I would imagine there are some good stories and fluff that this entry could have. Otherwise I really like this idea, and think the 'greater' version is where the ingenuity lies.
There is the part of me that loves this, and then there is the part of me that starts twitching at how poorly organized it is. Is this for modern or fantasy setting? *twitch* Why is there not a uniform method for detailing these things? Can't 'writing implements' be a category rather than several separate entries? *twitch twitch*
Reading through this I didn't put all the pieces together, but "drow" really pulled it all together and made it something special. I would have liked some inkling as to how he managed to 'punish' people as he does, is it connections? Psychological manipulation? Drugs? D. All of the above?