Fallout 3: Where Interactivity Meets Story

UGO Games Blog has put together an article that focuses on the story-driving choices presented to the player through dialogue trees in Fallout 3. The article also includes a quick Q&A with Bethesda's Pete Hines on the subject:
In Oblivion, players could sway dramatically between good and evil choices with little effect on the final outcome of the campaign, what has the team done to ensure that the story becomes a reflection of player choices in Fallout 3?

A lot of people have talked about the number of endings for Fallout and the ridiculous permutations we have, but that number is actually a reflection of our desire for you to get an ending that tells the story that you played. So we're not giving you a game where there's only one or two ways that the game is going to end. There's no good guy or bad guy, and that's it.

We want it to be a reflection of everything that you did along the way. So if you were a good guy, and helped people in some quests, but in these others you kind of did the evil thing--we want your ending to reflect the sum total of all of those choices, and not just a dialog choice, or one decision that you make at the end of the game. I think what we're trying to do--all along the way--is monitor as you make those decisions on a quest-by-quest basis, and have that reflect your total experience. As opposed to letting a player that plays 99 percent of the game as a good guy and then gets to the very end and makes one choice and suddenly they're evil. It doesn't make any sense. The ending should reflect somebody who did good all along the way and then turned evil inexplicably at the last minute. That should be your ending. We wanted to monitor what you did all along the way so it's not just some last-minute decision that you might have made that tells your story.