Damage control!
Funny stuff. This coop feature has been hyped to death as one of the main features of the game, and it's not even up to par with usual coop. I was expecting some kind of a revolutionary online coop adventure game, with a story possibly shared by the characters (something like Gears, but with side quests, and rpg elements). They were never clear on that, and for a good reason, since it's a completely useless mode.
Fable 2 becomes just another adventure game, and if Fable 1 is any indication, it's not going to be a great one. As far as I can see, there's still a very limited variety of enemies, and the combat looks lackluster.