Yes, Peter Molyneux has confirmed that Natal will be used in Fable. However, no specifics have been said. However, according to Kotaku, the phrase 'feces simulator' was mentioned.
Oh, Dear.
Source: http://kotaku.com/5387026/molyneux-fable-iii-will-use-project-natal#comments
EDIT: I suppose people could want my opinion on this matter, so I will share it. I like motion controls, and I like Fable. I'm not certain how the two combined will be, so I'll wait before I make any rash judgements. Plus, for all we know there could be some sort of bundle deal in the works, which would be pretty nice.
Oh, Dear.
Source: http://kotaku.com/5387026/molyneux-fable-iii-will-use-project-natal#comments
EDIT: I suppose people could want my opinion on this matter, so I will share it. I like motion controls, and I like Fable. I'm not certain how the two combined will be, so I'll wait before I make any rash judgements. Plus, for all we know there could be some sort of bundle deal in the works, which would be pretty nice.