Fez is what happens when you mix fancy, high-end modern consoles with 16-bit-era graphics, and put two guys with very serious detail obsession in control. In short, Fez is very, very impressive.
The PAX East demo I played is the opening of the game. A 20-minute jaunt through Villageville -- main character Gomez's floating hometown -- had me traversing the 2D environment and eventually receiving "the gift of 3D," the ability to rotate the game's 2D plane around a horizontal axis. After "Geezer" passes down the power of his (soon-to-be-iconic) hat to Gomez, something kind of magical happens in the game, but I refuse to spoil it for you. (You can thank me later.)
Then Gomez wakes up. It's the beginning of the game once more, though now you've got a little red hat and pulling either of the Xbox 360 controller's triggers rotates the entire plane of view in one direction or the other, revealing new, previously unseen areas of the gameworld.
Minute details litter the 16-bit landscape: animals that react to your character, fluttering butterflies and NPCs with hilarious conversation lines. The NPCs I encountered were full of charm, praising my square shape at the outset, and then marveling at my new world view post-hat.
Though platforming -- and solving puzzles/collecting chits/finding secrets with said platforming skills -- is the main gameplay mechanic of Fez, the surreal nature of Gomez's world and its many unique quirks are what make the game stand out so much. Every move Gomez makes is matched with ridiculously detailed animation. For a 16-bit-looking world, Villageville seems very lived in and "believable."
When Fez arrives this year, you'd be a fool to skip it. Phil Fish, one of Polytron's two employees, told me that the game is now "code complete" and the duo are just working on cleaning things up for Fez's release on Xbox Live Arcade. Fish also teased that we've seen almost nothing of what Gomez's bizarre and unique world has to offer. Frankly, I can't wait to play more.