I was playing on Fable 3 for about 30 minutes this morning and didn't encounter the freezing or performance dip issues even with Shadows set to Very High.
And why?
Well, I re-enabled the game's v-sync option to cap the framerate at 30 fps!!!
If I allow the game to run at 60 fps with the in-game v-sync option disabled and v-sync forced via the driver or D3DOverrider then every time I open a chest or dig for treasure then the framerate plummets to 20 fps from 60 fps and I have to press START twice to fix it.