Havok announced today that Molyneux and company have licensed Havok Complete for Fable 2. 'Complete' rolls Havok Physics and Havok Animation into one integrated package.
As Molyneux iterated, relying on Havok allows Lionhead developers to focus on the team's lofty aspirations, most-simply defined as dynamic regions, unconditional love, wealth accumulation, constrained combat, and an as of yet undisclosed uber-feature. As with the original Fable, at this stage it's hard to distinguish fantasy from reality (what gameplay elements will and won't make it into Fable 2's final release). But there is now at least one certainty: ragdolls.