We started playing Fable 3 this morning and I'm already impressed with a few of the improvements that I've seen.  The story telling does a lot more to actually include the main character and let you get to know him/her better.  Having the character speak more and forcing impactful choices early on is really drawing us in.

Kian and I started co-op right from the start and it let him pick his character in the opening parts of the game instead of making him feel like an after thought.  He then had his own dog right from the first gameplay which made a huge impact with him since he was bummed in Fable 2 that it was "daddy's dog"  The game also presented us with the option of a Business Partnership right away which is perfect for us since we want to share all of our assets and experiences anyway.  They just did a really good job of making co-op seem like it was planned from the start.

Every time I play a game with moral choice, I always choose good.  I've tried to play evil in several games, but can't get more than an hour in before losing interest entirely.  This is why I am enjoy playing games like this with my son.  They allow him to see the choices that are available but i'm rarely concerned with what he will see because of how I always play the game.  Fable also has lots of things a child enjoys, like various forms of gas, so he's always finding ways to entertain himself further.

I'm not sure if the story was more engaging this time at the beginning, but I found that he was paying much more attention to what is going on and is having an open dialogue with me about what we should be doing next.  Part of it could just be him getting older and learning to pay attention better as well, but I do think the opening of Fable 3 is pretty engaging.