The monsters of Fable are based on European folklore and fairy tales.  Many kinds of Trolls and fairy like nymphs.  And no one can for get Balverines, who's wicked fangs can infect the blood of your hero with many illness.  Below are some of the monsters that will be in Fable but not all for some of them are still a secret.
Nymphs
       Nymphs in Fable are mischievous.  They come in (from what I can tell) four different types.  One such type is the "pant-stealing" type (don't know for sure).  They nip at you while you swim and fight.  From screenshots one can tell that they can use magic (Will). 
Balverine
    These monsters are said to be much like werewolves are such.  With their yellow glowing eyes they are a frighting sight.  Don't try and take on a group of these nasty creatures for they tend to travel in large groups.
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How are you going to play Fable?
Evil all the way
A perfect balance
Good ways are mine
Uhhh...I don't know

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Trolls
   Throughout the lands of Albion travel monsters called Trolls.  They come in different types such as rock and ice.  Unlike most RPGs these creatures are about the same size as the heros, not in Fable.  These monsters tower above the hero and even shake the ground while they walk.
Other
  There are other monsters that wander the paths of Albion.  The top one appears to be some sort of bee or wasp thing, and the bottom is a scorpion type monster.  Both creatures so far are unknown about.
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