Gamespot has thrown up a Fable 3 gameplay video from that event a few weeks ago (external link). I think it involved a letter and a digit. D4? A2? E3! (You sunk my battleship
.) This video shows some of the ways players interact with the locals. Includes hand shaking, threats, and farts to the face.
Some information that can be gleaned from the video other than the obvious interactions is that the graphics appear much improved over the previous game. There is also the golden bread trail to your next quest. The interface seems a bit of the same, except instead of using the wheel to make decisions, the available options appear above a local's head.
I hope that will not create any adverse effects when running down a street and you accidentally hit the A button to fart in the cookie seller's face. I enjoyed my discount at her stall.
Fable 3 is slated for an October 26th release across all regions.