For first time RPGers, this game is great. For veterans, this game doesn't quite match up to RPG expectations.
Fable 2 offers similar customization to what Fable offered. Everything affects your good/evil standing, including armor and expressions. Every little interaction with the world changes how people view you. For people who are just starting to get into the extensive world of RPGs, this game is simple and entertaining enough to keep them engrossed for a long time. For veterans of the genre, you will be left wanting much much more.
The story is just as short as its predecessor. Side quests are present, but nowhere near enough to make it feel like a whole game. The entire experience feels like a replay of the first game. It is nowhere near as addicting as the first, and you will find yourself bored of it very quickly.
The combat is very easy and straightforward. Most of the time you'll find yourself using your close or long range weapon. The magic portion of combat is extremely downplayed, making it more of a grind to get through than a fun experience.
For veterans of the RPG genre, this game is disappointing. For new RPGers, this game is a very good start.