The Fable series has had a less than successful relationship with co-op play in the past. It was pulled out of the first game at the last minute, and the co-op in Fable 2 was pretty lame, forcing player two to take on the role of an anonymous henchman apparently attached to player one with a piece of invisible string. The online co-op hadn't been turned on yet when I reviewed Fable 3, but I've since given it a try and while it's unquestionably far better than what we got in the previous game, it's still a bit underwhelming.
You're given plenty of ways of finding someone to play with: you can invite a friend, hop into a quick match, or just scan the map in your Sanctuary for the glowing orbs that represent other people playing online. Highlight an orb with your magnifying glass, hit a button, and in mere moments you and your dog have joined someone's game. It's a pleasingly painless affair.
Once you find someone to play with, the most fun thing to do is go out and kill stuff, which isn't surprising given the weaponry strapped to your back. You have to stick to the same zone, but you can get as far apart from each other as the area's boundaries will allow. The feeling of freedom it affords is very much appreciated after the constricting nature of Fable 2's co-op, as is your ability to play as your actual character, as opposed to some random hired help. You'll earn plenty of experience and money by adventuring with your friend, which makes it not only fun but also worth your while.
Fable 3 makes much of the fact that you can go into business with your online pal, marry them and even have kids with them, but it's all a bit anticlimactic. I expected the business ventures to involve some amount of haggling or negotiation, but they came down to little more than "Do you want to do this?" and hitting a button. Proposing marriage was only slightly more involved: You need to be able to buy houses in order to get married, but after that it just comes down to your intended reviewing a list of your assets and saying "yea" or "nay". Actually, the option is "Reject and Kick," which is at least a little amusing. Even divorce is drama free - just hit the B button and you're a swinging single yet again.
I feel about Fable 3's online co-op much the same way I feel about unlocking new costumes: It's a nifty extra, but it's not the sort of feature that will make you love or hate the game. It's there, and it's fun, but you can safely ignore it and not diminish your Fable 3 experience in any significant way.