Agreed. I was really not much surprised with the plot and the villain. Jack-of-the-Blades... T'was too generic for me.
Here's a BETTER story idea they should have done:
After the fall of the Empire, with chaos and mayhem, monsters and theives roam the streets, and cities declare indepedence. There is much chaos...and the land beg to be unified together under one ruler.
One day, Jack-of-Blades, a hero, studied the legends of the Empire, and decided that, in order to stop the endless fighting and mayhem, he should summon that great sword. Cynical of the wars and of the arena battles, Jack-of-Blades desires to resurreect an old era, and will do whatever it takes, falling to evil, in order to do the greater good. Jack-of-Blades' interest in history explains his desire of capturing the Ariceologist and using him to figure out important information.
Jack-of-Blades is actually the Guildmasters of the current Hero Guild, its founder even. The Hero Guild is nothing more than a glorified merc clan that accepts both good and evil people, but that is the point. Jack-of-Blades saw this Guild as a way to keep order through the Land, as a step towards aquring the Sword. Jack also owns an off-shore prison, where you was imprisoned, as a proving ground for his military force, which will unleash once he has the Sword and ready to re-establish the Empire. Jack, along with Maze, searched the world to find the last descendants of the Royal line that has held the Sword. Jack learnt that the murder of the royal line will be needed to gain contorl over the Sowrd, and to summon it to prepare for conquest over the Land.
Jack starts off with paying the Robbers who invaded your hometown (in my story, it would remain a ghost town, even after 7 years later). You was "recurited" into the Hero Guild by Maze, who wanted to keep a tab on you, and use you to find your Sister and Mother, who is also necessary to be killed off. What Jack wanted to do is bto bring the three people together, and then murder off all of them to grab the Key necessary to get the Sword. This ritual was done in the "Head to Hook Coast" chapter, wit your sister and your life force's drained, along with your mother already captured, with her power being drained in the past.
When the game ends, you realize that the Sowrd is fading away. You have to choose to throw the Sword back into the sea, so that the ritual is cancelled, and that your mother, sister, and you recover your health...or kill your Sister, competling the ritual and grabbing the Sword's power for yourself. If you choose the latter, the game ends with you taking over the world, because of that Sword's power. The Sword is possesd by an greedy spirit, that seeks to conquer, subject and destroy...fitting for an evil person who taken the Sword, and fitting for Jack-of-Blades as well.
Regardless, after you kill off Jack-of-Blades, the Hero Guild, the tool of Jack-of-Blades to complete his mission of trying to save the Land from the endless and nihlistic warfare, is offically destroyed. You are now in charge of your own destiny.
Yes, this does not take into account the TLC chapter, but I already paid good money for Fable 1, and don't want to shell out more money for this add-on. Regardedless, this is how I would have written the story, and it may have been more effective this way.