you have various commands that you equip on a interface, when in battle you use any of the equipped commands and they're performed instantly, the catch is that each action has a recharge time of when you can use it again to nullify rediculous spamming of attacks, recharge times vary but reduce as you grow stronger. As a result the game is more action oriented then any MMORPG and gets faster as you level up, you're also free to move in battle as well.

This is the system WOW uses and the one Xenoblade is most likely going after, I'll explain this speculation right now. In the first scan I posted the is a screen with a battle in it notice at the bottom is a user interface with a few actions in it, this is similar to the set up to the UI in WOW where your equipped actions are on a bar at the bottom of the screen, notice how one section of the UI in the screen is highlighted indicating that the player chooses which action to perform from it.

Now to further back this up watch the debut trailer vid I posted in the OP, in the brief battles you see in it you see the same interface and the highlighted section moving across the UI freely further indicating you select attacks from it. In the video you also see several attack in the UI darkened out but gradually filling up in colour indicating the recharge time found in games like WOW, putting two and two together in this speculation suggests a WOW style fight system as opposed to the D&D system in kotor or the list selection system found in FFXII. The Video also shows you're free to move around.