I've only played with this a little bit, but I have a few thoughts on 3rd person, the free flight mode, and a few other things. This is the first version I tried free flight editing mode so this really should have been mentioned sooner. Anyway, free flight editor mode is pretty good, bit there really needs to be a pan viewport option, preferably by holding down the middle mouse button. Having to use movement keys to get down to ground level or move the viewport is OK, but there is always a pan mode in any 3D modeling or game engine level editor that I've ever worked with so it feels wrong to not have it.
3rd person needs to implement the mouse wheel so we can zoom in and out to get a view distance that we are comfortable with. And as mentioned elsewhere, we should be able to angle the camera up and down. Pushing the mouse in and out is one way I've seen it done. This is not a bad start though. The camera clipping when intersecting geometry is nice to see. I'm glad you didn't rush it out without that.
The fireball spell isn't quite right. The explosion is OK, but is obviously just a modern grenade type explosion and not very fantasy-like. The fireball should be a much larger blazing ball and the explosion should match the fantasy genre.
I tried the character creator briefly and it's not bad so far. The character I made worked in-engine just fine. Obviously more options will be something to strive for in future releases.
All-in-all some welcome improvements so far.
System Specs: OS - Windows 7 Home Premium 64-bit SP1, CPU - AMD Phenom II X4 945, 3.0Ghz, RAM - 8Gb DDR3, GFX Card - 2048MB NVIDIA GeForce GT 640, FPSC-R Version - Beta 1.0085