IGN has a feature discussing some of the game's NPC you'll encounter, including a trio of seedy and evil fellas. It appears that Fable 2 is taking a clue from Oblivion in terms of how your intereactions with NPCs will shape the world. Basically the more you "trust" the certain characters, the more the characters trust you; and therefore that opens up additional quests and options of a certain nature.
Hit the above link for full details on just how deep the RPG experience will be when Fable 2 hits this fall for the Xbox 360 with 2-player co-op. I wonder what kind of effect your partner's relationships with the NPCs will have on your game?