Sounds like the best way to go about something like this is to make it open source from the very start. This should benefit everyone involved the most I think.

As for using a trademark name like "Final Fantasy" in the title, I'm not too worried about it for the following reasons:
A) It never gets finished so nobody cares.
B) It gets finished in which case a C&D is too late at this point. The general rpg engine code does not violate any laws any more than someone creating a FF clone in game maker does. (I certainly will absolutely NOT be putting any copyrighted or IP into the main project.) As far as I'm concerned it's just a fan project that uses a custom game engine.
C) I forgot what I was going to say...needs sleep now.