Yup... Jade Empire really is that good. The story line is opening up well, there are minor branches and the old "good vs evil" main branches. The graphics are amazing. I would compare the animations in Jade Empire to those of Bloodrayne 2 in terms of details, swishing clothes, and character movements.
The fighting in Jade is a bit harder to talk about. I'm not a long ways in, so it is kind of hard to tell just how much it is going to open up. So far, I've been gaining skills and powering up some attacks, though it is hard to see a change. I would hope/guess that as the game progresses, that the attack styles really get rowdy. A friend said that he ended up concentrating on just a couple kinds of attacks -- that it is rare to really need to swap around through a bunch of styles. At this point in the game, I'm finding the same: a couple styles, and some light button mashing. It is definitely not a pure masher. Blocking, healing, jumping/rolling, strong attacks, selecting attack style, and changing targets are all needed. I just find that I don't block much, but I tend to play the tank anyways.
Speaking of jumping: you should really see it during combat. When you're facing your opponent, if you push the direction stick towards them and jump, you execute this amazing flip and spin over their head. Then you can whack 'em from behind. So, so sweet, and it looks so gorgeous.
Back to the two main paths: there is the Way of the Open Palm (aka "good") and the Way of the Closed Fist (aka "bad"). I'm going with Open Palm this time around just because I find it a bit strange to constantly deride and sneer at friends/teachers/others throughout the game.
If you like RPGs, and don't need them to be cooperative, then this is your boy. RPGs are a bit thin on the Xbox, but this isn't merely a "fill the gap" ... Jade Empire is a definite reference game.