Originally, our game started out very freeform. I never gave them set goals, so I never knew what was going to happen next. We were basically just playing through the daily lives of our characters as they went to school and got to know each other. Admittedly, things tended to get a little like a soap opera, but it was fun.
In-game, their first semester ended with a fight against a fellow student who was possessed by Fear Liath (the spirit which haunts the Ben Macdui mountain in the UK). The second semester ended with a fight against the headmaster, who had opened up a secret room under the school. Everyone liked the thought of having each semester end with a big fight. The only problem was that I didn't know what to do next.
Puppy's character, Prince, is the son of a dark wizard, who we all figured would become the main bad guy. So I started letting Pup decide the story arc for the semester. But one day he couldn't show up, and I realized that to keep my players satisfied, I needed to come up with a larger story arc. This sort of got out of hand (see picture).
The story has become complex. The characters have traveled all over the world to stop a very old demon from returning to Earth. They have watched friends die and have been maimed themselves (not to mention the psychological damage). There are themes of insanity, friendship, identity, and individual desires versus duty. At the same time, though, we've lost a little of the fun that came from simplicity. Right now, it's mostly my story and not an act of communal story telling like it used to be. And because we only have so much time before I leave (I'm at least year ahead in school of all of my players), I feel like I end up railroading things a lot so that we can finish the story. (http://rpgtalk.wikia.com/wiki/Railroading)
My advice? Keep it simple. This system is made to foster creativity. The Window calls my role the "Storyteller," but maybe it's better to think of yourself as one of the players. The story is something you should all be telling.