One of the best games I have ever played!
The physics are some of the best I have seen, you can pick up objects and throw them, or simply move them by bumping them. It is also cool to see people or animals fly through the air when killed or hurt badly. There are a few flaws or glitches in the physics but most of them are funny or cool.
To be honest you could just mess around with the physics and run around exploring for hundreds of hours. On the other hand you could do one of the hundreds of quests, and the best part is you always have tons of quests to do so you do not get stuck with just one you can't beat. One thing, IMO, that this game does better then Morrowind is that it organized the quests. Now you can see what quests you beat, what quests you have right now, and one main quest. The main quests will have arrows (usually) on your compass so it will guide you to your next location. Another new feature is the fast travel system, when you first start you can fast travel to any of the main cities by click on them in the map (you can only fast travel when outside and not when you are being chased or with enemies nearby). Then every location you find you can fast travel too. Its the perfect mix, you get to explore but when you find the spot ,if you choose you, no longer have to walk (or ride a horse) to get there.
The combat in this game is very fun, unlike Morrowind when your weapon hits the enemy, they are hurt. The higher your skill with that weapon, the more they are hurt. When you shoot arrows, they actually stick into the enemies body or armor. You can get many kinds of armor, some magickal, and use either your hands, shield, or weapon to block.
At the begining when you make your character you pick major skills, and when those level up ten total skills (combined), if you sleep you level up. The rest are minors that add to the bonus you get to add to a stat such as strength when you wake up and gain a level. This makes for a very interesting leveling system that can get tricky.
One thing I have against this game, is the technical performance, at least on my xbox, started to get bad after awhile. It slows the loading down and takes awhile to open boxes and chests. You can clear your cache (instructions in forums) which helps, or you might need a new disk. The only other thing I dislike is the game levels with you (all the enemies get stronger as you do and the loot gets better), so unless you level up well (getting plus 5s on your main skills like strenght), you will never really dominate too much, but you can always adjust the difficulty.
Overall I give this game a 10 because despite a few problems, this game is the best RPG out there right now (only one on the 360), and one of the best ever. It is hard to tell you everything about such a huge game, but if you are an action adventure fan, an RPG fan, or just a game fan, this is a MUST buy.