lowyhong: As far as I know, it uses Steamworks.
and as far as I know, you can register you kep with Stardock and download the DRM free key from them. Pre-order of the limited edition of Elemental :War of Magic here BTW. $40 is what you pay WITHOUT DISCOUNT. Non-steam keys cannot be redeemed on Steam (devs stated this). Yes it MAY use steam for achievments but the .exe ain't tied to steam if you don't want it to be. PS: did you like the civ IV mod Fall From Heaven 2? the guy that made THAT is the guy in charge of Fallen Enchantress.
In conclusion, The game so VERY removed from the original and I'd say to take a chance on buying it. the ONLY two games Stardock has released that REQUIRE Steam to run are Sins of a Solar Empire: Rebellion (reason is for matchmaking, preventing smurfs, and achievments) and the Political Machine 2012. I believe this snippit of a post by on of the guys at Stardock says it best: "Fallen Enchantress does not use Steamworks. It is available on Steam as a product, but thats all."
To make a comparson versus another game on steam, you can buy all the AI war expansions as well as the base game on steam but download the .exe's from the developer's site and input the keys into the game (I did that and it worked). No achievments but you got a DRM free install of the game.
The only games I can not download (and I own pretty much their entire catalog save Political machine series) direct from Stardock are Galactic Civilizations 2, Sins of a Solar Empire (& all add-ons/expansions), and the Corporate machine. All the other game I own (Elemental, Fallen Enchantress, Gal civ 1: Ultimate edition, and Demigod, I can download and install DRM free. Everything else I gotta use the former Impulse client OR Steam to download and run the game.