Co-op play in Fable 2 appears to broaden the game's combat tactics. Molyneux's character focused on shooting enemies with a powerful pistol, while his partner slashed away with a sword. Molyneux explained the simplicity of Fable 2's combat: magic, melee, and guns each have a dedicated button, so it's apparently quite easy to swap between them in the heat of battle.
GameVideos has a video of the co-op action. You can view it after the jump.
Fable 2 is an action RPG exclusive to the Xbox 360 and set to launch sometime later this year.
Update: I've just been informed that Fable 2's co-op isn't officially confirmed for online play. Sorry!
Source: GamePro