Penny Arcade Expo 2008 has kicked off today and with it comes a new set of gameplay videos of one of this year’s most anticipated titles, Bethesda’s Fallout 3. Unlike last demonstration at E3 08, this one shows off much more of the game, including character customization, the conversation system with NPCs, leveling up, and an example of one of many quests found in the game. Still don’t know what all the fuss is about? Do yourself justice and check out the five-part gameplay demonstration after the jump.

It doesn’t take too long before you notice that Fallout 3 plays similarly to Bethesda’s other action role-playing game, The Elder Scrolls IV: Oblivion, which isn’t a bad thing at all, given that Oblivion is the 2006 Game of the Year. The most surprising, if not shocking, has to be the last video which reveals that players will have the chance to blow up an entire city, if that kind of thing tickles their fancy.

Fallout 3 is set for release on October 28.