The dog can perform tricks to help you wow onlookers, he can learn expressions and he can find hidden treasures (dig spots) as well as point out cunningly hidden treasure chests and special quest items. He'll growl when enemies are near and as your character evolves, so does he. If you're good, you'll end up with a golden furred companion, if you're evil, you'll end up with a nasty mutt indeed. He'll even attack enemies when they get knocked down as long as he's got a high enough combat skill. You can teach him tricks from the Bowerstone Bookstore, or books that you discover lying around.

He never gets under your feet but he can be a little annoying when all you want to do is get from A->B and there's a bunch of hidden treasures, dig spots and the like around. Stopping every five seconds because he's barking to attract your attention gets a little tedious after a while. Of course you could ignore him, but then you might miss out on something like an augment (for your weapons) which is a magical stone that gives your weapons special powers. Or alternatively you could miss out on digging up a condom.
As previously mentioned Fable 2's Albion is a larger world, with much more to do. There are some quests that aren't open until you finish the core story as well and they bring interesting rewards. There are some quests that are repeatable and of course you have to do them to earn Renown, this will give you access to new expressions and allow you to progress further in the story. There are no gold coins in wooden chests and barrels this time, your main source of gold is either as a reward as part of a quest or from doing jobs in Albion's major regions. Jobs such as Blacksmithing bring high rewards fairly quickly, allowing you to build up enough cash to buy shops and houses. With shops and houses there's profit to be made from managing the prices and rent.
You gain gold every 5 minutes based on how much you own property wise in rent, and shops in terms of profit. You can also gamble in three unique games as long as you can find a Gamesmaster. These fellows let you play Spinnerbox - a game of chance where it's just a case of spinning three or more wheels to match symbols. Keystone, a curious little game where you're betting on an arch of stones to make money before the thing collapses and Fortune's Tower, where you have to get to the bottom of the card tower avoiding bad luck cards. Each game comes with the rules clearly laid out.

Fable 2 is also compatible with Fable 2 Pub Games, the Xbox Live Arcade game that came out before the core game. This lets you earn unique items for use in Fable 2 and gives you a chance to merge your Fable 2 character with the pub games character, porting gold that you make in Pub Games back to Fable 2. PM calls it emergent gameplay and whilst it might sound like a fancy word, it works pretty well. Fable 2 also lets you earn gold whilst you're offline. Every hour (we think) you're awarded a sum of gold based on property and shops that you own.
Turn off Fable 2 for example and go to sleep come back tomorrow and you may well find you've earned in excess of 140,000 gold whilst you've been away. Leave it off for a week and you're going to be rolling in those coins. If that's not enough PM and the team at Lionhead have created a world that rewards the explorer and those diligent enough to poke around every nook and cranny of Albion will find there's some nice loot to be had.