Here's a piece from the Gamespy preview of the game.
"The combat system is very different from previous Final Fantasy games. You won't see random enemy attacks or quick transitions from the level to combat. Skirmishes in FFXII are seamless. If you see an enemy, you can choose to run away like a coward or engage. Unlike past games, the environment plays a significant part of combat. Choosing the best place to attack and defend from can mean the difference between victory and defeat.
When you attack an enemy, a blue arc is displayed between you and your target. The same goes for your party, so you can see who your team is going after. As for your foes, red arcs represent their chosen prey. If you see four red lines pointed at you, then you sure as hell better run to a more advantageous spot in the environment.
Now, there are still some commonalities between the fighting system in this game and the ones found in its predecessors. Though you can let battles play out in real time, it's smarter to take pauses in the action to coordinate optimal strategies.
When you're not in battle, you can use the d-pad to select which character in your party you control, as well as any non-player characters you want to target for actions. Overall, the new navigation and fighting system took a few minutes to get used to, but felt quite natural after a short while.
At any given time, you can adventure with three characters. You can swap others from your roster. Control freaks can choose to select every single move their team members make. The more adventurous types can control the main character, while using "gambit" commands for the others. These are general orders, such as attack, heal, defend, etc. The characters AI kicks in under gambit mode and the character acts fairly independently. The system worked in the few battles I played, but how effective it is in the long haul has yet to be determined."