http://www.gamespot.com/xbox/rpg/fable/media.html
Trailer 3 is the one from E32k3. Most of the scenes in that trailer show environments that aren't in the final game, and the few that you can recognize are altered. Like one shot shows a hero in the bandit outfit on a hill overlooking Bowerstone, there are no fences and you can see all the buildings inside the town. Compare that with the actual game where you're stuck on a path leading down the hill, and there's a loading point to go inside. Then there are other scenes that show trolls coming up from the ground or Balverines in open areas full of grass that aren't in the game, buildings that are nowhere to be found, etc... This was back when the game was supposed to have no load times at all (only one long one at the beginning), instead we got a game broken up into tiny pieces with loads everywhere.
Look at this
screen index from 2003, and notice around page 6 you start to see the shots with the soft lighting, after that they never showed another picture with a large environment.
The only explanation I could think of is that somewhere post-E32k3 they simply started over with a new design, incorporated what they could from the old builds, and cobbled it together in a year.