If my information is incorrect someone please correct me, but I've been following this game since before the official Dungeon Siege site was up... So I will try to answer your questions the best that I know. =)
1. Yes the equipment does change the way you look, but the changes are based on tiers of items. Leather armor is going to look exactly the same as leather armor of jinkiness (or whatever prefixes/suffixes the equipment might have), but leather armor will look very different from full plate.
2. I would really compare this game to BG:DA or CoN. I thought some of the games elements reminded me of Dragon Age 2, also.
3. To be honest it really is too early to tell, since the demo didn't really show this. From what I've gathered from interviews, though, the choices you make won't have as much of an impact in the game's ending as, say, Fall Out: New Vegas or Dragon Age, but the choices you make will have consequences.
4. They add some procs and stats... I have a feeling though that you will replace them later on in the game sooner or later. If they are better than anything you can get in the game, the rings/amulets in the demo that I got off the vendor wasn't much worse (you can see the exact stats of the items in the English section of the website, not the American).
5. There is a co-op mode. Many people will tell their views on it... Personally I feel that it is a great mode if you plan on playing with certain people (like friends or family) long term with a predetermined playtime schedule. If you plan on playing a persistent character whenever you want like on Diablo 2 or even the first 2 Dungeon Siege games with total strangers, you won't be able to do that with this game.
6. Fantasy: Yes.
Beautiful Scenery: Play the demo and judge for yourself. I think it looks nice, though.
Music: It's good. Not as good as the first couple games, but personally I feel Jeremy Soule is an exceptional music writer.
Weapon Enchantment: As far as I know this is not in the game.
Weapon/Armor Vendors: Yes.
Treasure: Yes.
Bosses: Yes. The boss fights in the demo are quite fun I think. =)
7. This is an old school style ARPG, so if you like BG:DA or CoN you would like this game I think. In any case, though, you should really try the demo first, since all these are just my opinions for the most part.
Hope that helps some. =)
Thanks alot man. Thats exactly what I wanted to hear. A personal opinion from someone who knows Oblivion closer then anything else. I would hold on to your words. You actually inspired me to keep my purchase. I was thinking of getting my refund today. I give every RPG a chance, if I can, but I been so disappointed over the time I had my XBOX 360. I tried every single RPG to name I believe and only 5 caught my attention. The best RPG's is played for the system is Magna Carta 2, Star Ocean, Dragon Age 2, Divinity 2, and believe it or not, Final Fantasy XIV. Other I played, like Blue Dragon and Lost Odyssey, Record of Agarest War and other titles, but I got bored. So I am looking forward to a highpowered RPG.