Well, Lionhead Studios is definitely up to something.  The gaming community has recently uncovered a recruiting ad posted on the University of Bath's website, calling for doctoral students in "real-time humanoid A.I." study.

The Fable developer is apparently looking to a bright-eyed researcher and programmer who would be willing to work at Lionhead for three years as a part of earning a four-year doctoral degree. 

There is a more detailed description of the offer, though nothing points to any specific game.  Everyone's banking on some Natal progression, since it would be odd for Lionhead to branch off before their pet project with Microsoft gets a chance to take off.

Here's a segment of the recruitment letter:

The target of the research is to use upcoming game technology to create a humanoid character that will enhance the human computer interaction experience. The research should make use of multiple concurrent sensory inputs including 3-dimensional optical and audio, as well as user pose. These inputs may be used as part of communication exchanges, emotional empathy, and possibly physical interactions of some kind such that under a restricted set of circumstances it would appear that the Turing test had been passed between the character on the computer and the human subject.  Systems AI engineering will be emphasised,  as we aim to develop not only impressive demonstrations, but reusable components for human-like AI systems.

Really now, this is just going to make Milo jealous.  Before long, he'll run away in an act of rebellion against Molyneux and bump frames with some poor girl's Home avatar.

Seeing as how they're still looking for candidates, it's unlikely this has much to do with next year's Natal-compatible Fable.  Keep a sharp eye out!