The above is a short walkthrough of Fallout 3 that was just shown at Microsoft’s E3 press conference, also available right now on Xbox LIVE Marketplace. It’s pretty neat, and shows a number of features that will play a prominent role in the game. The first shown off is the PIP-Boy 3000, which serves as an option menu, to adjust your skills, use your items, and view your stats.

One of the big gameplay mechanics we see is the V.A.T.S., or Vault-tec Assisted Targeting System. When you’re in combat you can either shoot freely in real time, or you can use V.A.T.S. which makes combat turn-based. When using V.A.T.S. you can select which body part you want to fire at, and the game tells you your accuracy percentage. Obviously the head and limbs will have lower percentages than firing at a torso, but a head shot is a reward in and of itself.

The demonstration also shows off a wide variety of weapons, such as a sniper, shotgun, laser rifle, missile launcher, regular grenade, pulse grenade, and our new favorite weapon ever, the Fat Man - a mini nuclear bomb catapult. Yes, it launches a small nuke, and it is as impressive as it sounds.

If all that wasn’t impressive enough, the PC and Xbox 360 versions of Fallout 3 will be on the receiving end exclusive downloadable content, though there is no word yet as to exactly what that DLC will include. Fallout 3 will be released on the PlayStation 3, Xbox 360, and PC sometime in the Fall of 2008.

[See also: Fallout 3 gallery]