Greetings XBOX community,
Too those of you who may be having really bad frame rate issues with in side city limits (Bowerstone, Oakvale, etc.), the only solution I have found is basically installating Fable Anniversary too an original Microsoft XBOX 360 Hard Disk Drive.
I originally tried using a USB Flash Drive and a high performance one at that but apparently limits itself too just above disc speed level. After installing this game too the hard drive however, actually made my experience in towns in this game much better, though, some frame rate issue is noticeable but very much improved none the less.
Hopefully this helps with some of you out there. Don't know what else this could possibly fix in regards too other bugs as I am busy playing other titles at the moment. Hopefully results will be much better with my second play though.