In the best tradition of UUW, Arx Fatalis does manage to create a believable and immersive world. Voice acting is weak but the the story is solid, and playing it out was the main motivation I found to finish the game. The pan-and-scan static-image cutscences were a great touch, and clearly inspired games to follow like Fable. A significant drawback is that a true sense of character progression is absent. Skills and abilities -- particularly those related to combat -- didn't seem to do much over the course of the game. What was the difference between a weapon skill of 60 and a weapon skill of 80? Nothing obvious. My character really didn't seem that different to me after leveling up than he did at the beginning. Stats certainly seemed nowhere near as important, say, as having the best armor or weapon -- which makes the game a simple scavenger hunt. The magic system is simply awesome, perhaps unparalleled -- but the spells themselves seem very underpowered except one or two juggernauts (such as Vitae Movis) that are a essentially guaranteed kill.
The world felt... well, small. The number of characters was trivial, to say nothing of the character interactions. There were no dialog trees at all -- rather, a single reaction from each character at any given time. Regarding the game world, I always loved the thrill of exploring in UUW, but here it was more of a chore. There were less than a dozen monster types, and I found it pretty silly to be fighting the same rats and spiders in the last hour of the game that I was fighting in the first hour. Ditto for weapons and armor -- there just weren't that many different types, and it got boring fast.
In the end, this was my primary complaint: there just didn't seem to be that much to discover, or just to do. Another cavern, another tunnel -- but the same weapons, the same armor, the same monsters, the same canned responses from the same characters.
I did enjoy the game, perhaps more than I should have given my comments above. But it could have been so much more. It is perhaps a twentieth the game that UUW2 was. As an homage, it is an interesting standalone piece, worth a play for old times if you liked the Ultima Underworlds.