Question

I’m planning to create a tiled world with OpenGL, with slightly rotated tiles and houses and building in the world will be made of models.
Can anybody suggest me what projection(Orthogonal, Perspective) should I use, and how to setup the View matrix(using OpenGL)?

If you can’t figure what style of world I’m planning to create, look at this game:
http://www.youtube.com/watch?v=i6eYtLjFu-Y&feature=PlayList&p=00E63EDCF757EADF&index=2

Answer 1

The projection used by that video game looks Oblique to me. There are many different projections, not just perspective and orthographic. See here for a list of the most common ones: http://en.wikipedia.org/wiki/File:Graphical_projection_comparison.png

You definitely want perspective, with a fixed rotation around the X-axis only. Around 45-60 degrees or thereof. If you don’t care about setting up the projection code yourself, the gluPerspective function from the GLU library is handy.
Assuming OpenGL 2.1:

glMatrixMode(GL_PROJECTION); //clip matrix
glLoadIdentity();
gluPerspective(90.0, width/height, 1.0, 20.0);
glMatrixMode(GL_MODELVIEW); //world/object matrix
glLoadIdentity();
glRotatef(45.0f, 1.0f, 0.0f, 0.0f);
/* render   */

The last two parameters to gluPerspective is the distance to the near and far clipping planes. Their values depend on the scale you use for the environment.