Molyneux has one huge problem: he thinks of too many interesting ideas. This problem gets exacerbated in one of two ways: it's not feasible (money or time-wise) or it just doesn't work that well.
Honestly, the prior doesn't bother me that much unless you follow the game's development and lap up all that he spews. However, it's the latter that ends up bugging the crap out of me, and Fable 3 is the most egregious example of it yet. I recall hearing him talk about how he would give players this awesome area to go to when you hit start: your sanctuary. What I never realized was that he would end up removing almost all the menus that we're accustomed to. Now, I'm not one that is against change simply because it's different, but I am one that's against change because it makes things worse. Fable 3's menus made everything simply take longer to do and for very little added benefit, and even though he gave us an "improved map", it was still terrible and completely worthless.
It makes me wonder who in the world play tests his games. It took me only a few minutes to realize, "Wow... this is terrible." :\
EDIT:
To sum it up, Peter Molyneux is the gaming equivalent of George Lucas.