Here's a batch of Folklore screenshots and an announcement trailer. Rather than ramble on about this one I'll let Sony's press release do it instaed.

Developed by Tokyo’s Game Republic under legendary game creator Yoshiki Okamoto, executive producer for OnimushaTM, Devil May CryTM and Resident EvilTM, FolkloreTM is a unique, dark fantasy adventure inspired by western fairy tales and built to showcase the power of PLAYSTATION®3 (PS3TM) computer entertainment system. Set in the mysterious town of Doolin, two strangers, Keats and Ellen, are drawn together to uncover a mysterious legend in a remote village that exists on the border between dreams and reality. They soon learn that the town serves as a gateway to fantastic realms, full of creatures, spirits and monsters. In order to solve the mystery of the town, and their past, the pair must journey through these worlds to uncover its secrets.