When I first saw this, I thought it was pretty funny, in its cheesy way, although I wasn't quite sure what I was seeing. Guitar Hero meets Guild Wars?
After looking into it a little, I found out that the makers of Sacred 2: Fallen Angel, an action RPG, hired German progressive metal band Blind Guardian to create a theme song for the game. In turn, the game's developers used the game engine, along with motion captures of the band, to put together an "in-game concert" showing the band playing the song to an audience of characters from the game. In the video I first linked above, you're seeing bits from that concert interspersed with clips from an intro video to the game.
Which is, combined with the song itself, undeniably awesome.
And yes, the lead guitarist is in fact playing a battle axe.
The game is pretty decent, as I found out as I sunk a bunch of time into it this weekend. RPGs have always scared me because I know they have the potential to make me into a helpless addict, sucking away all other ambition. But man, they are often very impressive, with incredibly high production values compared to the FPSes I tend to play more often. Sacred 2 is especially interesting because it has slick graphics and uses PhysX for additional-stuff-flying-around-everywhere effects. Should make a nice addition to our test suite.
Now, if you'll excuse me, I have to go buy a Blind Guardian album on iTunes.