It sounds like dramatic moral choices and sacrifice--things that were also key to the previous game--will be turned up in the sequel. Here's a bit of Microsoft's news release with some more detail:
Fable III is scheduled for release during the holiday season of 2010, which for some reason strikes me as a little soon for another Fable.In this new adventure, you will witness tyranny, poverty, and injustice plague your land. You will see a people divided, and you will be compelled to stand up for change. You will also be forced to answer a question: What would you sacrifice to secure the crown of Albion? Will you uphold the values and principles that led to your ascension, or will you be corrupted by the station you've strived to acquire? Will you be a monarch of the people, or bring the entirety of Albion to the brink of collapse?
"We've spent a lot of time at Lionhead thinking about how we can innovate the gameplay and progress the world of the Fable games for its third chapter, and we're confident that players won't second-guess what we have planned for Fable III," said Molyneux, who also serves as creative director of Europe, the Middle East, and Africa for Microsoft Game Studios. "Though I can't give too much away right now, players should expect to have to make much tougher choices with far wider consequences than ever before in Albion—and with many more interactive adventure elements."
In the epic story of Fable III, the journey to rule the throne of Albion begins five decades after the events of the last chapter, and you play as the child of your hero from Fable® II. As you rule your kingdom as king or queen, you will be called upon to make choices and sacrifices that will test your morality and can affect your entire kingdom. Themes of heroism, leadership, and consequence are taken to a grand scale as you fight to unite a divided people.
In addition to the announcement of Fable III, Microsoft has also announced that Fable II will be going episodic. This will entail breaking the game up into five installments. Players will be able to get the first episode--which covers the young adult portion of the game--for free starting on September 29. At the completion of an episode, players will be given the option to purchase the next installment or, in some regions, the entire game. "Fable II: Game Episodes" will be fully interchangeable with the disc-based version of the game, so if players start a game in the free chapter then end up getting it on disc, everything will carry over. Pricing for the other installments were not released as of this writing.