As you blaze your way through Diablo III's dungeons, it strikes you almost immediately: Blizzard really has a handle on the notion of reward.

Kill a creature, and it comes apart at the seams in a satisfying spout of gore, body parts, gold and loot. Death sequences are beautifully animated, and you find yourself dipping in and out of your inventory with great frequency, to see whether the gear you're collecting is an upgrade to your current outfit.

But it's more than just the carrot-and-stick of loot that makes Diablo III such a fundamentally pleasurable experience. Every action you perform gives you a sense of feedback; from the white-hot blaze of combat to simple inventory management. Selecting a chainmail vest in your backpack prompts a gratifying metallic rustle; precious gems clink, and bows give off a woody thunk. This is the framework for the Diablo III experience: it's designed to constantly massage your senses, and yes, it feels very good.

It's now ten years since arch dungeon-crawler Diablo II launched, which makes it nearly as long in the making as Duke Nukem Forever. And at Blizzcon 2010, where Blizzard recently announced the Demon Hunter character class, Diablo III felt pretty close to completion. Of course, they won't be drawn on precisely when it'll launch; Blizzard's mantra is 'done when it's done', and it's one that has served their games well in the past.

"The Demon Hunter is definitely darker and more sinister than your typical sort of Ranger character," Diablo III's lead designer Jay Wilson explains to us. And as we test the class for ourselves, it's plain to see what he means. The Demon Hunter's combat skillset is surprisingly versatile, combining ranged damage with side effects which slow and damage enemies over time. The main skills we toyed with were Entangling Shot, which chains three enemies together and slows their movement, and Multishot, which transforms the bolts from your dual crossbows into a fearsome shotgun-scatter that shreds multiple foes. The combination turns you into a ranged death-hose that constantly keeps the enemy at arm's length. A third skill, Vault, enables the Demon Hunter to move out of range quickly if something breaks through her no-fly zone. She also has a range of traps to drop, which are handy when backing away from an advancing wall of monsters.

But there's more on show than the new character class, says Wilson. "One of the huge new things for Diablo III is the skill-rune system. Runes can be found throughout the world as loot. You can apply them to a skill in your skill tree, and they dramatically change what that skill does. As an example, the With Doctor class has a Plague Of Toads skill, where he throws out a bunch of toads which hop out and explode on your enemy. Now, you can put a rune on that skill which turns your toads into flaming toads. Flaming, exploding toads. You can then put another rune into it which turns it into a rain of frogs from the sky, so it becomes an area-of-effect skill. And there's a further rune upgrade where, instead of lots of different toads, it becomes one giant toad that sticks its tongue out and grabs guys, and spits out the loot".

That's potty, and pretty far-reaching. There are five different kinds of runes, and seven different strengths for each rune-type. Given that every skill in your skilltree can be upgraded in this way, there's massive scope for modification of your character's abilities, and the ability to personalise your character way beyond the cosmetic. That's going to be a lot of fun when you take your character online.

And that's the other big development since Diablo II. Multiplayer, which will be tied into, is way more accomplished this time around. It takes two forms - co-op and PVP - and while the Diablo universe is distinct in its own right, it's plain to see that the Diablo team has learnt a lot from World of Warcraft. There's a definite air of similarity, as you combine skills to tackle dungeons together.

Co-op is a blast. With two buddies at your side, the action ramps up enormously, and the dungeon in the demo build became an indoor fireworks venue as three of us lit the walls with our combined spells and effects. We found ourselves tearing through the environment, melee up front and ranged behind, and making light work of the smaller enemies. But over-pacing yourself comes at a price. At one point, the Monk melee-specialist I tried out found himself a little too far ahead of the group, and suddenly, fatally, beset on all sides as he reached a crossroads.

PVP takes place in arenas, and is uncompromisingly swift. Playing with fellow show-goers, our mixed group (Warrior, Wizard and Demon Hunter) found itself hopelessly outclassed by a party of three Wizards, who'd been playing together in co-op previously. They hit us hard at range before we could close the gap, and we fell repeatedly to their summoning spells and ranged-damage bolts. I felt an enormous desire to really tinker with my character, to tweak its skills and gear for PVP.

Don't hold your breath. With much of Blizzard geared up for the launch of World of Warcraft: Cataclysm in early December, the focus isn't on getting Diablo III out of the door anytime soon. But if there's one thing that our time with the game has hinted at, it's that Diablo III will be worth the wait.