DLC: Fable II – Knothole Island

Content: Fable II – Knothole Island
Price: 800 Microsoft Points
Availability: All Xbox LIVE regions
Dash Text:[ESRB: M (Mature) BLOOD,LANGUAGE,USE OF ALCOHOL,VIOLENCE] Discover new quests, locations, characters and more in the premium Knothole Island download. Meet Gordon the submariner in the Bowerstone docks, where you’ll be showered with unique gifts to entice you to the mysterious island. There you will embark on new adventures, fight new creatures and find Albion’s rarest weapons, clothes and potions. You will also be able to check your standing in over 50 new Leaderboards on Lionhead.com. If you have the Knothole Island (Premium) pack and want to play co-op in any part of Albion, your co-op partner must have the Fable II Knothole Island (Free) or (Premium) pack. To enjoy the complete Knothole Island experience in co-op play, both players must download the Knothole Island (Premium) pack.

There is also a Title Update available for Fable 2 that addresses some issues. Details here.
Edit: My understanding is that the free version is for players who want to play co-op with someone who has purchased the DLC.