This game is friggin addictive! It's tons better than the first game and really fun. I couldn't stop playing it cuz there are soooo many sidequests. I didn't even complete them all when I finished the main quest.
The graphics are uber gorgeous. While the character models could've been more detailed, the world looks amazing. I was especially impressed by the art direction and lighting. I found myself sometimes stopping to stare at the beautiful locations. The colors really pop and the world is just full of life with swaying trees and little critters moving around. Even the caves look really nice and colorful. Whether it's day or night, the world looks fantastic. I only had a few minutes of slowdown and there's some fade-in but it's not too bad.
The audio is wonderful. The music is excellent and does a great job at creating the fantasy feel of the game. It's all very subtle and never overwhelming. I gotta say that there were a few tracks that reminded me of the music from the XBLA game, Braid. It's definitely a great soundtrack. The voice acting is just as good. Every single character is perfect. The main characters are particularly awesome and really do a great job with all their various emotions. The humor was great and the delivery of the jokes are spot on. Good stuff.
The gameplay is your usual RPG fare but the combat system is what I wanted to talk about. It's extremely simple and incredibly fun. The melee, range and magic attacks are all mapped to one button for each move. The ability to switch from one to another on the fly made every battle enjoyable. There wasn't one time where I was bored or tired of the combat. It's just plain fun and I hope other action RPGs will take a look at this. And just like Dead Space, the game allows you to find your objectives quite easily with a glowing trail. Very smart. FYI, you can turn it off if you don't want a guide which is a nice option.
One of the best features is your dog companion. This dog is great and might be on par with other great video game animal companions like the horse in Shadow of the Colossus. You really get attached to him and he's actually very useful. He'll look for treasures for you and help you in combat if you train him enough. But the best part is that he'll keep you entertained when you're running around all alone during some quests. I have a dog and I can say that Lionhead did a magnificent job capturing the behaviors of what dogs do in real life. He is incredibly life-like and is animated really well. Well done.
While the main quest's story was good, the sidequests are pretty interesting in their own right. They're a real joy to play through. They're not simple little jobs (which you can do on the side for the Jobs section) but there are a ton of sidequests which really are quests! They're pretty massive and some of them took a lot of time to complete. Some sidequests even have multiple parts which will have you going to various secret locations you wouldn't have found if you skipped them. I didn't finish or try some of them cuz they would obviously change my character's alignment but I will definitely check them out when I replay the game. This is one of the more addictive parts of the game.
But not everything was perfect. The menu interface is really annoying. Example: Whenever you use a potion in the menu screen you get dumped back into the game instead of staying in the menu screen. If you plan on using a bunch of potions like the EXP ones then you're gonna have to jump into the menu and look for the Potions tab over and over again which is just silly. The same thing applies to the Food tab as well. Ugh. I'm also not a fan of the whole Expressions function. It's kinda lame and not that deep. And once you're married, maintaining a relationship is a real pain in the butt. I won't hold much against the relationships aspect of the game since it's optional but the clunky menu interface kept me from enjoying the game as much as I can. Maybe the Dead Space devs could meet up with Molyneux and work something out. 
Overall, Fable 2 was a real surprise. I knew it would be good but I didn't know it would be THIS good. I wasn't a fan of the first game like most people who played it. Fable 2 definitely improves on a lot of things and really made the game easy to play. The story is good, the combat system is stellar and all the various activities are incredibly addictive. This is a must buy for action-RPG fans. Btw, the British humor is just brilliant. ^_^