I loathe it. I truly, utterly despise it, from the Two Worlds-quality dialogue to the Fable deceit of making an ostensibly open world walled off into cramped, linear paths; to make manners worse there are invisible walls everywhere (which can't be just to limit the demo area since they occur all over the place, even around the edges of rocks and so forth). At one point there is a small pond with a waterfall; every RPG ever has taught players to look behind waterfalls for hidden caves or goodies, but this game doesn't even allow you to try. The supposedly dark and scary forest the hero is afraid to go through is tiny and well-lit, a total joke compared to the forests from any Piranha Bytes game.
You can't sleep in beds (in fact, hardly any NPCs do either), people don't care if you steal their stuff right in front of them, and you can't attack people who aren't hostile towards you; even Fable let you do all of those things. The inability to sleep means you can't change night to day or vice versa, and people not caring when you steal your stuff makes night-time thievery unnecessary and the sneaking skill worthless. Alchemy tables and other crafting stations can be interacted with, complete with great animations, but they don't actually do anything--instead your character crafts things from a menu at any time with prowess that would make MacGuyver cry. There is even a setting in the options to make such stations unusable.
About the only thing I can say in its favour is that it is very pretty, but this is just lipstick on a pig. Overall it reminds me very much of a mixture of the worst ideas of Two Worlds and Fable. Those games didn't compare well to Gothic either, but they were still more enjoyable than this demo. Arcania isn't just a poor Gothic game, it's a poor RPG.
An Xbox 360 demo is also available for the dirty console playing peasants among us, although from what I've read you'll need Gold to get it.