We were shown the basic in-game talk interface: get near another character and hit the A button to start talking. You can direct the flow of the conversation, by selecting your responses with the left thumbstick, choosing from a radial menu. For instance, if someone is telling you about an attack, you can pick things like "Too bad they didn't kill you" to "I'm sorry" to "Really? What happened?"
They aren't exactly what your character will say, they're more like the gist of it. We tried to piss the people we encountered off, but no one took great offense. One woman we encountered really wanted to tag along with us, and although we tried as hard as we could to dissuade her, the last talk menu we were offered with her was something like, "Sure", "Go ahead", and "Okay". No, "Get lost!" option, so she must be important to the mission.
It reminded us a bit of the chat in the Indiana Jones games, although those gave you the actual lines that Indy would spout out. Conversations are crucial to Mass Effect, and end up providing you with information and shape your relationships with those characters. It's also how you can pick up additional characters that'll join your party, as evidenced by the woman who joined up with us.
When you have additional party members with you, you'll see their health bars in the lower left of the screen, and you can also issue commands to them, which comes in handy when you want to send them ahead into enemy fire while you hang back behind cover. "Asps ... very dangerous. You go first."
The combat system is very familiar to FPS vets, pull the left trigger to whip out your weapon, right trigger to fire, and you can switch weapons by holding down the X button, which pulls up a radial menu that you can select from. We were outfitted with a powerful rifle (sans scope), a shotgun, a pistol, and a small machine gun / blaster of some type. You'll find types of weapons as you go along, and you can also pick up components and ammo that you can use to upgrade your weapon with. We found some armor-piercing rounds that we picked up, although we didn't take the time to equip them. Armor-piercing rounds? We don't need to steenking armor-piercing rounds.
We also briefly used the "powers" that you'll access in the game, namely a sort of "force push" ability that can blast your opponents across the landscape, or sort of disembowel them and kill them on the spot. The aliens we tried it out on sprayed phosphorescent-white blood all over the ground in a Jackson Pollock pattern. Ouch. There was also a healing ability that came in pretty handy, especially after we kept taking shots to the face with our clever "Distract the enemy by letting them shoot us" strategy.
We also encountered a locked door, and we were given the options of hacking the lock, using "parts" to open it, or just ignoring it altogether, We hacked in, but the development team told us that you'll be able to pick up parts in your travels, and you'll use them to modify, hack, upgrade, and otherwise cause general mischief throughout the Mass Effect world with.
The game looked very sharp, with gorgeous eye candy-like graphics throughout, although there were a few frame rate drops and a heck of a lot of clipping going on. When we spoke to the woman who joined our crew earlier, whenever she gestured with her rifle it would go clean through her body. Maybe it's a magical holo-rifle! It reminded us of the countless hours we'd spent watching Quantum Leap and seeing Dean Stockwell walk through everyone. The devs quickly stepped in and said the demo was a very early build, and that they'd been playing it over and over on the same console, and as a result it was degrading a bit. They then shoved us into burlap sacks and beat us senseless, before depositing us in an alley with a copy of the Mass Effect novel.