It is really neat stuff how they did it. Obviously, digital painting back in 1998 was pixel dependent and not vectored like we can do today, but there is no reason why something as artful could not be accomplished today.
Pillars of Eternity actually does an incredible job of this in the Unity engine. They used the same technique by making expansive 2D backgrounds (just not as big as the maps in BG, sadly) and then populated them with 3d rendered objects. Pay very close attention to the Odema's Camp right at the beginning, you can see that it is a "showpiece" that received a lot of love and attention, not just because it is the first thing players see.
The environment is a flat, 2d planar map, but they have 3d rendered adra rocks and walls and characters. They use lighting to blend it all together. You can tell very well that the trees are painted then rendered. It is gorgeous.
