The HUD is very similar to this, but it has been tweaked, slightly.
As the game progressed I eventually made it to a small town. NPCs were more than willing to advance the plot and dish out side quests, mostly of the "go hither/kill this" type. Once again, the game looked very good. All of the NPC's seemed polished for a game that has about three and a half months left until its release. Character interaction took place via a conversation wheel, where different responses could gain influence with NPCs. I did not get to see how this influence impacted the game. On a side note, most of the female NPCs had an Angelina Jolie/Megan Fox hybrid look to them. This wasn't necessarily a bad thing.
After a somewhat challenging boss fight I was introduced to Anjali, who acted as an AI controlled companion character. She used her fire spells well and even healed me when I was downed. The build we were playing allowed for instant respawning, otherwise it would be back to a checkpoint if you were K.O.'d. The checkpoints did seem few and far between, but since they weren't affecting my play style, I took little notice of them. In the final version of the game, the whole party will have to be K.O.'d for you to be sent back to a checkpoint. Therefore, if you go down, you have to nervously wait and see if your AI companion will heal you. In the build I played, Anjali always seemed to prioritize saving me. Revival isn't item or class based, so anyone can revive anyone else at any point in time.
I leveled-up a few times in my play through. I added skill points to Lucas's Talents and Abilities. Talents are actual special moves that require button presses, while abilities are latent powers, such as 5% to critical damage, etc. So what happened when Anjali joined the party? Her level-up screen opened, and I distributed points to her Talents and Abilities to sync her with my level. I also managed her inventory. Each character has their own weapon and armor types. You can switch between character menu screens with the push of a button. It was very fluid and easy to navigate. You cannot, however, switch control between characters. If you chose Lucas, you control only Lucas. AI, (or a co-op buddy. I promise, I'm getting to the co-op!) controls your companion.
I had a chance to play through the build twice. The second time I played as Anjali. Her melee weapon was a spear, and her battle stances changed between a human form and a fire elemental. When she was in her Archon form her hair was ablaze and she used fire magic. I noticed the game seemed much more difficult with her, as enemies quickly closed the distance, making her ranged attacks ineffective. Her area of effect spell seemed underpowered. I mentioned it to one of the producers, providing the caveat that magic users often seem overwhelmed in the early stages of RPGs, only to become forces of nature in later levels. He smiled knowingly.
Okay - so here's a bit about co-op, at least, the bit we can talk about so far. In the first break out session I watched as two developers played through a cave level as Lucas and Anjali. They were only showing local co-op, one dev played as Lucas while the other jumped in and out of the game as Anjali. He said that he could choose any of the three characters, even if the host player had not unlocked them yet. He could not choose another Lucas, so there would be no clones running around. Two players can play locally on a shared screen. But what about experience, story progression, and loot? How, exactly, does co-op work? All those questions will be answered soon.
Dungeon Siege 3 is shaping up to be a very beautiful and incredibly accessible game. The game itself has a more arcade-style feel, something very different from its predecessors. Whether this type of dungeon crawler makes gamers happy, sad, or sends them into a fit of rage remains to be seen - but we'll find out this May when Dungeon Siege 3 is released on the Xbox 360, PlayStation 3 and PS3.