I tihnk that the story and characters are excellent. Riki can grate on some people, but he and the rest of the Nopons are handled really well, and they actually pull some funny twists on the idea of the cute mascot character. Otherwise, the story is heavily influenced by the same gnostic philosophies and concepts that drove Xenogears and Xenosaga, but in a setting divorced from those earlier titles.
Is Xenoblade connected to gears and saga? They obviously start with Xeno, but I wasn't sure. Should I play those as well? I hear Xenogears is something of a classic.
Xenogears is great. The whole Xenosaga I think is crap though.