I'm using a dead hippopotamus as cover. Really. Bullets are pounding into its thick, lifeless flesh as I reload. It's quite useful, in a terribly tragic way, of course.

I'm in Shanghai Zoo. As Salem, one half of the Army of Two, I'm popping in and out of the hippo's backside (not literally, as in Ace Ventura: Pet Detective), taking pot shots at enemy soldier heads. When they connect, they explode in a small spray of blood. Then I bunker down behind the hippo, reload, and repeat.

It's quite good, really. As with the first game, the flawed but entertaining Army of Two, the action and mechanics are very Gears of War. It's a two-player co-op game (although developer EA Montreal insists the differences are marked) - I'm playing here with another game journalist. It's a third-person cover based shooter - isn't everything? And the two central characters are soldiers with massive, throbbing arms.

And yet there's something different about Army of Two: The 40th Day (why, exactly, it's called The 40th Day, is still a mystery). Not just compared with the first game, but with other third-person cover-based games as well. It's not the "Aggro System", retained from the first game despite only middling success. No. This time around what's different is something called "Co-op Playbook".

Let's back up. Producer Matt Turner is demonstrating the game, spreading the good word while he plays. He says the co-op experience is more organic this time around. Now, organic is a great word to use when hyping a game, because, really, it doesn't actually mean anything, but we'll give him the benefit of the doubt. Turner says the first game was linear, which is right. It was. Now, you're able to tackle challenges using special co-op moves. "We're putting the co-op in the hands of the player."

The Co-op Playbook sounds lifted from American Football, a game we're sure Salem and Rios enjoy.

Salem and Rios, in civilian clothing and sans those masks from the first game, are on Nanjing Road, Shanghai, having just triggered the first checkpoint The 40th Day has to offer. More of the world is realised this time around. We see mist, floating particles, cars driving in the distance, pedestrians doing that walking thing they do. A meat vendor is slicing and dicing to our left. Shanghai, more so than any location in the first game, is designed to be a living, breathing world.

The dastardly duo meet up with a horribly voice-acted English merc-type called JB. They follow, picking up some gear and their masks along the way - "better safe than sorry". But the masks are raised - you rarely saw Salem and Rios' faces in the first game. In the sequel the pair lift their masks when they're safe - a visual indication that you've cleared an area of bad guys and you're cool to scratch about for new ammo and weapons. This will give players more of a connection with the game's two stars, Turner says. The eyes, as they say, are windows into the soul.

And now, a change I think almost everyone who played the first game will welcome: EA Montreal has reigned in the ridiculous frat boy humour the two would often engage in, replacing it with darker, more serious banter that reflects the tone of the sequel. "More like Bruce Willis in Die Hard and less like Martin Lawrence in Bad Boys," says Turner. Effectively what this means is you'll hear less of the "poontang" nonsense during firefights. This is undoubtedly a good move on the developer's part. I don't know anyone who didn't find Army of Two's dialogue off-putting. The best bit of banter we heard between the two went a bit like this: Rios: "You avoid elevators in the event of a fire." Salem: "You ignore bullshit in the event of a war!"

Much more successful in the first game was the weapon customisation, and EA Montreal has built upon it for the sequel, describing it as "LEGO with guns". You can now customise weapons at any time, including during combat. Inter-class mixing is possible, although only with limited parts. And home made parts are now included, because, well, the Shanghai populace are scrounging around for bits and bobs to defend themselves against the invading force that's destroying their city. The developer spent a lot of time researching home made gun parts - screwdrivers and kitchen knifes on the end of guns, Soda Cans as silencers - that sort of thing. That last one, Turner says, is actually real. It was in a book he bought for the team. Also in the book was a live cat - again, for use as a silencer. They didn't use that.

The point here is that selecting, say, a screwdriver to put on the end of your weapon doesn't just make it look nasty, it makes it feel nasty. Melee with that bad boy and you'll actually hit them with the screwdriver. Maybe that "LEGO with Guns" claim isn't so ridiculous, after all. Of course, you can still "pimp" your weapon, as in the first game - EA Montreal decided that was a feature too hard to let go. But supplementing the gold pimp look are other skins - jungle, Amazon, forest, desert, zebra, tiger, that sort of thing.

The two are caught up in an invasion of Shanghai by a mysterious invading force

Turner mentions something called "Pre-Combat". What it means is the mysterious invading force has a purpose outside of Salem and Rios - or you. You're caught in the middle of the chaos, an unwilling player in the wanton destruction of Shanghai. You're escaping, more than anything else. So, if the bad guys spot you, they'll ask you to surrender. Here's where the "Co-op Playbook" comes in.

Sneaking up on groups of enemies in The 40th Day seems to be a more pertinent mechanic than it was in the first game. Do this, and, with your GPS, you'll be able to scan the area before getting into a scrap, identifying enemies and coordinating the "play" with your chum. Turner shows off an example. He sneaks up behind a bad guy, one who, along with others, is holding a number of civilians hostage. When in position, he performs the hostage grab, forcing the others to freeze. Then Turner's demo mate comes in, tying the goons up. No deaths. No bullets fired. No civilian casualties. Positive morality.

That's right, I said positive morality. Now, before you get your knickers in a twist thinking Army of Two's gone all Fallout 3, it hasn't. The 40th Day's morality system seems to be a particularly basic affair that affects the story at certain key points, and determines instant rewards at others. One co-op play situation I actually get the chance to try out myself later rewards doing the right thing with a weapons cache that would otherwise be locked. Inside was a lovely sniper rifle I would not have the opportunity to get later.

EA Montreal's hope is that friends will argue over what to do - whether to go in all guns blazing or play hero. These arguments will play out via headsets over PSN and Xbox LIVE. If neither can agree, though, the game, like real life, will react if someone's got an itchy trigger finger. If you're playing with a bit of an Army of Two git, he'll no doubt prefer shooting first and asking questions later.

The big question, of course, is just how morally grey these decisions will be. All we've seen so far are examples where it's clear what the good decision is - save the civilians, keep everyone alive, that sort of thing. But Turner promises the game will pose serious moral conundrums. Salem and Rios, or you and your mate, will both be sat on the horns of some particularly fiendish dilemmas.

The 40th Day promises to be better than the original in almost every way

Back to the zoo, and we finally get some hands-on. The controls are as before, typical third-person shooter stuff. An aeroplane crashes straight into Shanghai Zoo - right in front of Salem and Rios. Turner says the choice of venue is deliberate - the team wants to put players into real city environments converted into war zones. A zoo worker has gone mad, sprouting nonsense over the PA. Elephants, hippos and other animals lie dead - all potential cover, all potential law suits from animal welfare organisations. The madness kicks off with a coordinated, co-op sniper shot following a three, two, one, fire countdown. You need to make sure enemies are really dead, otherwise they crawl away to safety - although this sets them up for a satisfying shot in the arse. I flip a cage and use it for cover. I take down a heavy shotgun enemy type with one sniper shot to the head. To kill a heavy grenade type we need to take shots at his grenade pouches on his belt - they'll explode, ripping flesh from the oversized nutcase's bones. During downtime Salem and Rios engage in a friendly game of rock, paper, scissors. Like Match of the Day's Goal of the Month competition, it's just for fun, but will be useful for sorting some of the lighter, "who does what?" questions during co-op play over PSN and Xbox LIVE.

EA Montreal's clearly improving on the first game, rather than tearing it up and starting again. This is another smart decision: Army of Two wasn't lacking much that would elevate it into the 8/10 category. Still, what we can safely say from our hands-on is that the "through the gun experience" is much better this time around. Put simply, The 40th Day feels like a better shooter than its predecessor. Weapons feel weighty and impactful. Enemies soak up a lot of bullets before they bite the dust, but when they do go down it's with impressive animations. The weapons sound solid, too - the result of a Los Angeles sound recording session with a whopping 80 microphones. Enemy AI is better - they can now do everything you can, including reviving teammates and helping each other reach higher ground, although there's still a slight "whack-a-mole" feeling, as with most cover-based shooters, including Gears.

We'll have to take Turner's word for other changes and improvements. Shanghai itself is a city that's destroyed as you explore it. You're not fighting in a disaster zone that's picking up the pieces, you're fighting in a disaster zone as the pieces are flying by your head. As Salem and Rios move through the city streets, planes will crash into buildings, skyscrapers will collapse and fall, and the mysterious invasion force will slowly reveal their motivations. These cool moments, Turner says, happen to you.

The 40th Day is shaping up nicely. It's undoubtedly going to be better than the first game - that much is obvious. While the "Co-op Playbook" sounds like a marketing gimmick, it should make the game a much more interesting, tactical affair. And the morality system, while no doubt basic, should make for some entertaining co-op sessions. That, after all, is what Army of Two is all about.

Army of Two: The 40th Day is due out for PS3, Xbox 360 and PSP on January 8, 2010.