When interacting with an NPC I don't feel any real connection to them because the lack of dialog. In games like KOTOR and ME dialog made you connect with NPCs. In Fable all you get are expressions to rinse and repeat with NPCs. In Fable II when you would try to marry someone you would use *expression* *expression* *expression* *gift* *expression* *expression* *gift* *weeding ring* boom your married. I know Fable isn't KOTOR, ME or any of those games but they could still have some dialog options. I just don't find using expressions in the game to be fun or interesting.
While having a dialog system like DO:A would really help with the immersion factor, it would take a very long time to put in all that dialog for every possible situation. It's the main reason why I'm not playing DO:A right now, too much dialog.
But Dialogue options are stupid and that's why Lionhead isn't going to go with them. Expressions are awesome, especially with the new Touch, because you interact with the characters instead of just spraying them with some words written out on screen.
Dialog wheels are awesome, but not really fit for Fable.
I wish they would extend the amount of dialog villagers have, if only to make it so marrying people actually has some sort of entertainment benefit. Marrying someone or becoming their friend/enemy unlocks a whole new layer of things they say, beyond "oh my husband!"
Buster: It's so watery... and yet there's a smack of ham to it! Lindsay: It's hot ham water!
Want to know the difference between dialog options and expressions?
Dialog gives you the illusion of choice. I say illusion because you still have a limited number of outcomes regardless of which dialog choice you make. No matter which dialog options you take, you're still ultimately led around by the nose to two or three endings. Didn't want to save the universe in Mass Effect? Too bad, you're going to do it whether you like it or not.
The Fable developers have chosen to replace this illusion with the option of adding a little humor to the proceedings. You thought Hammer would've gotten smoked in the Crucible? Give her the thumbs-down, she responds and the story continues along its set path without trying to BS you into thinking something earth-shatteringly different would've happened had you given her the thumbs-up.