http://community.lionhead.com/blogs/fable_2_development/archive/2007/08/31/2769402.aspx

Highlights include a declaration that the water will look better than in Bioshock.

 It’s nowhere near finished. Think about that for a second. It is not finished. So yes, the game will look at least a gazillion times better than anything you’ve seen of Fable 2 so far. Anyone doubting that for a split second deserves a kick in the butt. Compared to some other games, Fable 2 is graphically going to be a Masterpiece. We are talking about vast and expansive outdoor locations, with added night and day cycle with realistic lighting effects that dynamically change the environment around you. There will be uber-detailed textures and lighting on up to fifty character models on screen, all of which will cast a dynamic shadow of themselves on that same environment and the same goes for any object in the world.

Also, the third developer diary will come in October and explain the link between love and combat.

I loved the first game. It didn't do everything they said it would do, but even then it was still AMAZING (they did promise the world after all)

Wow .. definitely will be picking this up for PC whenever it comes out (the first one did, so I assume this one will)

I think it will come to PC, but it could be MUCH later. By the time it does it will be severely outdated, plus the controls in this game are being better optimized for console use (such as one-button combat). You'd have to really love this game to purchase a 360 for it, but if there are other games on the system you like (especially seeing as this game could be ten or twelve months away), you might want to get one after a second price drop

I think Fable 1 was way too consol-ish for my Baldur's Gate-like RPG-fix. Definitely looking forward to this one though.

Wasn't the original fable the game where they promised the world and barely delivered on any of their promises?

Not trying to bring anyone down, I hope the game is good, but I have heard from a number of places (the most recent of which was a quite hilarious video, aka Zero Punctuation, that the original fable was supposed to have a bunch of cool stuff but they implemented all the "kewl" stuff in "shitty" ways.

^^ Comon it´s Peter Molyneux, he always promises the world, Fable 1 was a great game, not perfect but great and it brought a lot of great elemets to the genre that never had been there before. Creative minds like Molyneux will always want more than is possible, I bet this time he will get closer to his vision and it will be a fantastic game :)

Any game with Peter Molyneux involved is worth getting excited over because you're pretty much guaranteed a great game.

They sort of promised to be the first game to truly introduce consequences to choices on a massive scale. They did achieve this, but not to the extent that was expected. In any case, it still got game of the year from a couple of publications, and for anyone who played it without reading about it online and the huype surrounding it (like me), it was just a great, near-flawless rpg. The only problem was it was finished in about 16-17 hours for me, which is too short for an RPG. Still, it was so great i replayed it twice, and there WAS sufficient consequences and choices to make each time different

Edit: In any case, using next-gen processing power, they should have more skope for the introduction of choices and character empathy 

It's a Molyneux game. Like always, it looks like the best game ever while he hypes it, but will almost certainly fail to meet any of the expectations.