In Fable 2 & 3 you could select the gender of your character, but that was it. Their appearance was then shaped by your karma etc. like in the first game.

The trailers have used a female hero as the stand in, which, for some reason, people have taken to mean we don't get to choose the gender or anything.

As I understand it, their main benefit is in aiding alignment rather than for strength.

Yeah, one thing I remember from visiting Vienna was how proud people seemed to be of the tap water (and it was indeed nice).