Lately, everyone keeps saying that I look different. Maybe it's that new jacket I bought, or the fact that I've started taking regular exercise. Or perhaps it's all those trips I keep making to the plastic surgeon. Two hours ago I was an ultra-thin old Asian man with long white hair; now I'm a pudgy white guy with a green combover, a high-pitched woman's voice and badly-applied lipstick. Welcome to user customisation, Saints Row 2 style.

It used to be the case that Grand Theft Auto was the unrivalled king of the sandbox thug sim. Considering the poor quality of games like True Crime, 25 to Life and Crime Life: Gang Wars, you really have to applaud Volition's success in creating a genuine rival to the series with the original Saints Row. Now that rivalry is set to be fuelled with the release of a sequel which expands upon its predecessor in every possible way.

While there's no doubt that GTA IV will be regarded as the best game of 2008 by many people, some gamers have complained about the relative lack of things to do in Liberty City - especially when compared to the circus of diversions that was San Andreas. If you consider yourself to be among this disappointed group, then take heart: Saints Row 2 will offer you all the variety you need, and then some. This game features demolition derbies, helicopter rampages and underground fight clubs. There's the opportunity to gamble, the opportunity go "surfing" on car bonnets - there's even the opportunity to take off your clothes and go running around like a lunatic. There's so much to do in this game that it would be impossible to cover all the options in a single preview, but we're going to cover as much as we can.

At the end of the first Saints Row, your gang-banging rudeboy was caught in a massive explosion. The new game kicks off as you emerge from a coma five years later, beginning with a character creation screen that defines your post-surgery look. The original game was pretty generous with the options it gave you to play with, but now the flexibility has shot through the roof. While there are a number of pre-set routes you can take if you just want to dive headlong into the action, more dedicated gangstas will want to fiddle with the huge array of sliders on display. Changing these alters a real-time model of your character, making it easy to tinker in detail; the gender slider is particularly good fun to toy with, allowing you to sit and gawk as your muscle-bound hard man slowly grows a pair of tits (which are then immediately covered up with a bra). If you're feeling especially cruel, you can then make them age 20 years in three seconds - watching saggy flesh has never been so fun.

Aside from your appearance, you'll also be able to change the way your character speaks, walks and interacts with NPCs. In the spirit of fun, Volition permits you to mix male and female elements within the same character; allowing you to create some truly scary creations. If you want to play as a purple-haired supermodel with a cockney growl, you can; if you want to play as an enormously fat bald guy with orange sideburns, you can do that too. This changeability allows you to play through the storyline in a serious manner, or to turn the cut scenes into a bad acid trip - and because you can easily visit the plastic surgeon during the game, you're not forced into either one of these approaches. You can switch at any time.

Once you've picked an initial look for your murderous nutjob, your first task will be to escape from prison. No slow beginnings here - you'll be shooting cops and blowing up helicopters right from the get-go. If you're used to the combat and driving of GTA IV, the arcade-like controls of SR2 may feel a bit unusual - but the light-and-simple handling makes them very easy to pick up. Movement is mapped to the left stick, while aiming goes on your right - there's no lock-on here, just free-form shooty bang-bang. Forget about Gears-of-War-style cover mechanisms - just shoot anything that moves. Selecting a weapon is a simply a matter of holding B and selecting an item with the left stick - but in addition to your stored arsenal, you can also pick up scenery items using the A button. These range from hammers and barstools to traffic cones and garden gnomes; no matter where you are, there will always be something close by that can be used to break skulls.

Once you've escaped from captivity, the whole city of Stillwater is yours to explore. You can carry on with the plot if you like, but you'll also have the option to drive around in search of the game's many Activities and Diversions. The former are sort of mini-game submissions based around specific tasks, while the latter are the simpler things you do in your spare time, like gambling or holding up stores. We actually found a diversion by mistake when we hijacked a car and drove off with a civilian still sitting next to us in the passenger seat. In GTA, the victim would just scream for a bit and bail out when they could; here we were offered the chance to start a game called "Hostage", where you must avoid the police whilst maintaining a high speed for a set period of time. Classy!

The samurai sword lets you pull off a really nasty finishing move. Eat that, gitface!

While the diversions are lots of fun - who doesn't enjoy moonlighting as a perverted flasher? - we believe it is the selection of Activities that will really get people excited about this game. Initially all the mini-games will show up on your map as a "?", but once you've found out what something is you're freely entitled to take part at any time. There are now 12 in total, combining new missions with revamped versions of those seen in Saints Row 1 - this includes leaping in front of traffic to commit Insurance Fraud. Of the new ideas on offer, we particularly liked Fight Club - a brutal arena-based beat-em-up that sees you taking on multiple opponents at once with fists, bricks and bottles. Smacking a rival fighter to the floor allows you to enter a brief Quick Time Event; if you successfully pound the right buttons in time you'll break your enemy's neck with a sickening crunch.

Completing Activities earns you respect - the in-game currency which unlocks new story missions - but it also grants you new skills and abilities. Completing the Fight Club missions, for instance, will give you hand-to-hand combat styles like wrestling and capoeira. It's not like you really need an additional incentive to undertake these activities, however, as they're plenty of fun already - especially when you start fooling around in the two player co-op mode. Volition seems to have put in a huge amount of effort on this front: friends can join in your game at any time via system link, Xbox Live or PSN and can assist (or hinder) you in activities or on Story missions. In the latter case, a player will be able to join their mate on plot-centric levels even if they themselves have yet to reach that point in the game; when the session is ended their progress will be saved, and when they eventually reach that stage of the story they will be given the option to skip the missions they've already completed. The whole co-op experience has been designed to be as easy as possible, allowing players to drop in and out as they please without affecting their friend's progress; it's really quite impressive, so lets hope other developers are paying attention.

For our own test of SR2's co-op, I went on a prolonged rampage with our new video editor, Seb Ford. After gunning our way out of jail on the aforementioned intro mission, we decided to head to a clothes store so we could change out of our orange prison jumpsuits. While I was happily browsing the T-shirts, Seb managed to start an enormous fire-fight with some cops in the road outside. The shopkeeper fled in terror, so I attempted to join the battle - but found that a massive pile of blown-up cars was blocking my exit. Eventually Seb shunted the wrecks out of the way and I drove us both to the next story mission - which involved us racing to the local courthouse to rescue Johnny Gat, a returning character from the first game. After murdering a judge and three dozen security guards, we escaped and started an Activity that asked us to spray an entire neighbourhood with liquid shit from a septic truck. After this we ended co-op and went our separate ways: Seb headed off to evict some squatters from his new crib, while I helped out a TV crew by dressing up as a policeman and then beating up a couple having sex in public. All in a day's work for your local g-units!

There's still so much we haven't mentioned. We've not touched on the vibrant designs of the enemy gangs, including the Japanese Ronin who ride black-and-yellow motorbikes in true Kill Bill style. We've not mentioned the way you can customise the look and style of your own gang - if you want to lead a group of ninjas who ride around in rubbish trucks, you can. We've not discussed the excellent soundtrack, and we've not talked about the multiplayer deathmatches (more on that later in the month).

So yes, there are many things we've not mentioned - but that's inevitable. The important thing to hang on to is that there are LOADS of things to do in Saints Row 2, and that doing them is a right old bag of chuckles. Indeed it would be fair to say that what we've seen of the game so far has easily exceeded our initial expectations. We'll be serving up some multiplayer coverage later this month, so check back then for the shizzle, my nizzles... or whatever the kids are saying these days.

Saints Row 2 is due out on Xbox 360, PS3 and PC in October.