In a hands-on preview of Fable 2 at Kotaku, Michael McWhertor notes that the game's combat is fun "especially when the dog comes to your aid, gnawing on the limb of some recently dispatched foe". That's a sort of enjoyment that is common in games, but the potential is largely unexplored.
I'll venture to say that what Molyneux's team has done with canine companions is a monumental achievement; a stepping stone toward an important trend in future games. He's capitalizing on the joy of love.
As the philosopher Peter Kreeft once said, love is about "with-ness". It's a desire and/or choice to be together with something; in presence, in experience, in ideas, etc. Love is about communion.
When you love any being, you take joy in simple exposure to it. A newborn baby can't even focus its eyes, yet family and friends are captivated by anything and everything he or she does. Likewise with pets and wild animals. There's joy in merely watching and listening to them.
The deeper, more complex NPCs become, the more potential they have to entertain the player through exhibitions of personality, quirks, and dynamic experiences. In McWhertor's Fable 2 experience, the dog in combat is doing nothing very different from companions in Diablo 2, yet the player's interest in the dog's actions is significantly deeper. A well-rendered, clever (AI), dynamic pet evokes a stronger emotional response than a 2D, simple-minded skeleton without a name.
One of Bungie's brilliant moves with Halo was giving NPC companions dynamic comments. The player kills an enemy and a soldier behind him says, "Aww, man. That one was mine!" (or something like that).
NPC mistakes can be made endearing, rather than frustrating. Trivial dialogue can be made more memorable than story arcs. It can be done through deepening characters... adding individuality and dynamicity. Fable 2's dog is an important step that barely hints at things to come.