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Folklore is awesome from what I've seen so far.  I played the Japanese demo.  Every enemy you face you can absorb their soul (using one of the coolest Six-Axis functions yet...pulling back like catching a fish).  Every soul gives you a certain magical ability using their spirit either to attach, protect, heal, or whatever.  I think you can mix and match and use a lot at the same time.

I can't say much about the story but the game played well and should be a pretty good action-RPG for the PS3.