Hi and welcome.
To answer your first question, I was definitely planning around what you call dynamic music. Ideally I want different themes for the galaxy map, ship design, space combat, and ground combat; those are the four basic categories for in-game music (not counting intro movie, title screen, victory screen, and end credits). Ship design is semi-optional, MOO3 didn't bother with a seperate track for it, MOO2 did, I happen to think it's worth it when done well.
I agree event-driven is cool, if you can pull it off. However, in a game like MOO, there really aren't a lot of different changes and triggers that come to mind -- maybe for the galaxy map 3 modes of neutral, peace, and war. Exactly how you define these is tricky though: does it go into war music mode when you just start a war, or when you're at war with anyone, or when you're at war with more than two or three players, or when you're at war with a majority of players? Then for space combat, 3 more music modes of quiet, skirmish, and full engagement.
The main problem I see with doing it this way, cool as it is, is that I was hoping for different themes for each race. I don't think the details have been nailed down yet but it's probably safe to assume there will be at least 8 races or so ultimately; I happen to think that's a good number, enough for diversity but not so many that they all start to feel similar and watered-down like with MOO3, which had 16-ish. And writing that many seperate themes for, at a minimum, the galaxy map, and making sure they're all really good is by itself going to be daunting. Let alone having different pieces for each race's space combat. I certainly wouldn't want to tackle seamless event-driven transitions that many seperate times.
That being said, I am also open to doing the event-driven modes as described above for both galaxy map and space combat. But it would severely limit how much giant-melting-pot incorporation of other people's compositions we could do. And since I already have several pieces posted that I really like, I would probably work on expanding those rather than using other people's work if we were going to do it this way. Personally, I think the replayability and feeling of real racial diversity from having seperate themes for each race outweighs the coolness of event-driven changes in the background music during gameplay. And it wouldn't really work to have event-driven changes in the themes for some races but not others.
As for what we need... thus far I've been working under the assumption I would probably wind up suppyling most of the music for the game. So I've been trying to write a little bit of everything. Please have a look at them (see the Mongoose Music thread) for an idea of what's already out there. Thus far I only have one galaxy map theme I'm really happy with (AI), so that's probably the area that still needs the most attention. I would recommend a variety of styles and genres depending on the race. An empire of lizards ala Saakra should have drums, exotic sounds, maybe some warhorns like Star Trek Klingon music. An empire of elves should sound very passionate and stoic and moving, maybe go classical with deep choir here. An empire of humans should be some combination of techno (I've said it before and I'll say it again, Starcraft Terran music is one of my all time favorites) and industrial, but don't overdo it. Etc. Biggest thing to keep in mind for galaxy map themes is they need to be SLOW. Stay in the BACKGROUND, with possible surges now and then. You're managing a galactic empire while this is playing, there needs to be an epic feel while staying relatively relaxed. (Not necessarily happy, just relaxed, save stressful for combat music.) Also try for something that's at least 5 minutes long and preferrably 10+; the longer it goes between repeats the, umm, less repetitive it sounds. :p And that's important.
Hope this helps. If you read the "Announcement" thread I talk a little about trying to minimize the number of ppl doing the actual production ie synth playback, which I suppose I should probably clarify at some point and put all this into a sticky... but anyway, suffice it to say composition assistance/submissions are welcome, but I'd prefer MIDI files so that I can at least try producing them off my synth hardware. For now though this is not required and feel free to post mp3s if you prefer.