In the demo, we wandered through a goblin settlement, with one goblin mellowly noodling away at a guitar, and others much less mellowly performing emergency surgery (there being a war on and all). Firefly promises a living goblin city, full of characters who go about their business like any other townspeople would, having conversations, working, and enjoying time off -- and not just being braindead NPCs.
But this is an action game after all, and you are an "emotionally retarded" dungeon hero, and that's got to involve beating up monsters, right? The combat in this game is designed with crowds in mind. That means that the hero's moves are built not to generate huge combos, but to push goblins away. In combat mode, moves mapped to each of the Xbox 360 pad's face buttons will attack in that direction -- so A attacks downward and Y upward. RPG elements come in the form of a dauntingly enormous skill tree with hundreds of nodes, broken up into ten or so branches.
Dungeon Hero looks like an interesting mix of action and semi-satirical RPG gameplay. It manages to embrace most dungeon RPG tropes while self-consciously calling attention to them. In addition, occasional cutscenes are illustrated in very nice-looking comics, which remind us of 300 (possibly due to the constant swording). It's currently scheduled for a March 2009 release on Xbox 360 and PC.