I play on 360 too. Framerate does drop just a liiittle bit occasionally but on the whole it plays verrrry smoothly.
I've played Oblivion, Fallout 3 and Mass Effect on the 360 and this game plays even more fluently than Fallout 3. You can explore wide open regions without any loading screens or "Loading Area..." pauses.
Character animation is not good. Depth of field is used extensively and beautifully. Some textures are a bit sloppy, others look great. Overall, I'd say this game looks better than Oblivion but not as good as Mass Effect, graphically. From a design standpoint (more important than graphical prowess, imo) it's wonderful. Never did the designers attempt to re-invent the wheel but somehow the landscapes, villages and characters all exude a level of personality that makes it stand out above your generic fantasy worlds.