Brace yourself: Overlord wasn't a great game. It was a good game—and it had a good idea—but style choices and control options and myriad technical flaws kept it from being the best evil experience ever.
Overlord II aims to change that in two major ways. First, the technical flaws are being aggressively addressed by the developer. AI has been updated so minions don't do stupid things, minion path-finding has been fixed so they don't do stupid things and a physics engine has been added to allow all kinds of new ways to be evil - like catapults. Second, now you really have to be evil instead of only partially evil. The choices you make and the minions you control are more black and white about their actions. The result will be either a lawful evil or chaotic evil Overlord: you can enslave or kill; you chase baby seals away from their homes or you can club them.
Those are the major changes that will actually have an impact on the overall Overlord experience. All the rest - save one - are subtle changes that don't change the way you play the game; they just make it more pleasant. So even though the controls haven't changed, you might find it far less frustrating now that other things have been updated.
Save One: The major gameplay update I saw was the Possession stone. The way it works is that you can order your minions to dance around the stone if you find one and use a spell to possess one of your minions. As that one minion, you can lead all the rest through parts of the level to accomplish things the Overlord can't do alone, like infiltrating a stronghold in stolen uniforms.
You're No Longer A Robot: The original Overlord character design was a little jerky and robotic. The new model - who is technically the son of the Overlord from the previous game - is burlier and moves more fluidly. It may seem like a cosmetic improvement; but to me it looked like it was easier to move the Overlord around when fighting and casting spells.
Ignoble Steeds: Minions get mounts in this game. There are parts of levels you can't get to without mounts and parts of the game where you have to make do without them. Each type of minion gets a different kind of mount - I saw brown brawler-class minions riding wolves for most of the first level. The wolves made the minions more powerful and enabled them to jump across wide gaps.
There is both a mini- and a meta-map: Praise be.
Split-screen co-op: See above.
One Button Spells: This is the only real update to the control scheme that's definite - instead of having to hold down several buttons to pull of a spell, you only need X (I'm guessing Square on the PS3). There's talk of fixing the camera control to the left stick in a more traditional 3rd person adventure game - but that hasn't been finalized.
Less Bloom: Producer Carl Johnson explained that more and more developers are using deferred rendering in their environments. The result is a richer, more realistic appearance where animators can pull off stuff like blurring on fast-moving minions. Also, it means less bloom.
Three, count 'em, three girlfriends: There are three female characters in the game in different parts of the world. You can bring each back to your Dark Tower (located in the Netherworld, now, so you've got more space to decorate), or you can bring them all back. There's a special - and somewhat mysterious - Achievement if you can get all three.
Bowling for Romans: The theme of the setting in Overlord II is ancient Rome. That means columns of red-plumed-helmet-wearing guards marching across plains. You'd be surprised how much those things look like bowling pins when you've taken control of a catapult and are hurling huge boulders down at them from on high. Watching them scatter in all directions when the boulder hits is even more hilarious, especially if the boulder rolled into them after landing in front of them.
Overlord II is due out on PS3 and 360 in June 2009 - same day as Overlord: Dark Legend hits the Wii and Overlord: Minion comes out on the DS.