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At E3 2011 today, Debbie Timmins of The Average Gamer caught a live preview of Fable: The Journey and some detailed info from Peter Molyneux himself.

"The watchword for Lionhead when building this game is “freedom” with the press conference demo intentionally restricted to rails in order to show off the spellcasting and combat system. As Molyneux told us today “You’re free to navigate and move round however you like. Free to take different pathways, free to go off-road."

http://n4g.com/news/781305/the-average-gamer-previews-fable-the-journey-its-not-on-rails