Here's some more Fable 2 details, direct from GDC.
Players can pick a male or female hero
Players can choose to have protected or unprotected sex (and yes, there are STDs)
Female heroes can get pregnant
Players can have children
The world responds to your "hero-ness"
Two new character morphs (besides Good/Evil): cruelty/kindness and wealth/poverty
Own every single piece of property
Players can become king