At Microsoft's GamesCom 2009 press conference, Peter Molyneux of Lionhead Studios revealed the first trailer for "Fable 3" (which you can watch below).
He then went on a bit of a rant, talking about what the game will focus on. As hinted at in the "Fable 2" DLC pack, "See The Future," "Fable 3" will place you in the role of an up-and-coming ruler in the land of Albion. Half of the game will be spent trying to gain the crown, while the other half will have you maintaining your kingdom. You can make changes to your realm, which will result in a happier populace or a better economy.
But once you rise to power you'll still have to go about the land, interacting and exploring like a typical "Fable" game. There's just this added metagame which allows you to change the land as a whole, rather than just change things around you.
The game is still super early in its development cycle and won't release until late 2010 (if we're lucky), so don't hold your breath.