Lionhead Studios recently updated The Lionhead Times with new details regarding the NPCs and fame system of its upcoming Xbox title Fable. The update is an extensive description of NPC/player interaction, which is essential for altering the fame - or notoriety, if one prefers - of the main character.
In summary, NPCs in Fable will not be mere static figures that spout bits of dialog. Instead, they will go about their own business in town, be it working, shopping, chatting with friends, or drinking at the pub. In addition, they will actively respond to the character, even running to greet him as he enters town. They will laugh at the main character, or run away if he seems fearsome. Players can respond to NPCs by making the character laugh, shout, swear, or show off. The character's reputation can even differ from town to town. In one area, he may be the local hero, and at the same time, in another area, he may be the most hated criminal.
Fable is scheduled to be released sometime this year in North America. Keep checking RPGamer for more information.