Your appearance in Fable changes to reflect your in-game personality and actions but that's not the whole deal for Fable II.
"Everyone starts in Fable II as either a little boy or a little girl and will grow up to adulthood", reads the official note that accompanied the latest patch of Fable II screenshots.
"You will change visually to reflect your choices and actions in the world of Albion but it doesn't end there...we now have so much more clothing (think masks, hats, …) all of which can be dyed (in pretty much any color), plus we have make-up, jewelry, hairstyles and facial hair plus all the many different morphs (like strength, fatness, skin color etc...) which will mean that each hero will be very unique. Taking every single thing into account that will influence what you look like, our programmers calculated a number that goes well and truly into the billions."
The new screenshots are available through the screens tab.