Its not a open world game, but its not linear either.
The game is divided into 4 chapters (if i remember correctly), each chapter covers a story arc. And each chapter has its own locations and towns, etc. While you in the middle of one chapter you can freely visit all the locations of that chapter (oh and going from one location to another is not seamless). Once you complete the chapter story arc and go onto the next, then you cant travel to those locations anymore. So i guess each chapter plays like a open world game. You choose what side quest you wanna do and in what order etc. But the game as a whole, is not a open world game.
I hope that answers your question. I wouldnt really say its like Mass Effect, the locations are a good size in witcher 2. And im sure by the time it comes out for the 360 they would have optimised loading and streaming even more.
Irrespective of the level structure and whatever other issues you might have with it, its a really good game to get. Its a bit short though, but other than that its fully worth the time and money. 
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