I've never played Diablo II -- which this game seems to be drawing a lot of comparisons to -- but this is certainly a fine entrant in the hack/slash/loot category. Actually, the franchise that did come to mind as I played Titan Quest is the Age of Wonders series, in the sense that as I played I kept thinking what a well-made game this is.
Titan Quest (and its expansion Immortal Throne) doesn't break any new ground in its genre, it just does what it does extremely well, providing the gamer with a seamless experience that rewards attention to detail -- few things are as satisfying in gaming than being able to succeed because you've grasped the game's concepts and put them into your service. In other words, there's never a point in Titan Quest where you feel as if the game is working against you -- if you play by its rules, Titan Quest will let you win, it's as simple as that.
The graphics are sufficient and sometimes impressive (the visual effects for elemental attacks, for instance). The music is serviceable and occasionally evocative. But it's in the gameplay and user-friendly interface where Titan Quest shines -- from the inventory system to the skill tree to the teleport system to the plentiful caves and mausoleums (dungeons), it was a pleasure to enter a game world that feels as if it were crafted by developers who play the game they make.
This is not to say Titan Quest is a perfect game. The save system, for instance, employs checkpoints (or rebirth fountains, which is where you end up when you 'die'). All well and good, but if at any point you end a session -- say, to take a break for sleep or nourishment -- when you resume you'll do so at the last checkpoint you touched, and all the monsters you defeated in the previous session will be right back on the map. So if you've made deep forays into enemy territory but haven't reached a checkpoint, and had to stop because it was time to do some adult thing like go to work, when you start again, you'll have to do it all over again. This is generally not an issue, because you learn to take this into account, and in fact this feature allows you to 'farm' areas for loot and XP. Still, it's not uncommon to find yourself in the position of having to fight minor boss battles more than once.
And speaking of loot, the inventory system seems inadequate at first because of all the loot you uncover and the limited space you can put it, until you realize that you can safely ignore 90% of the spoils and keep only upgrade items and potions, which you have plenty of room for (in fact, your inventory capacity increases as you progress, another indication that the devs have thought of everything to make Titan Quest a satisfying experience).
In short, Titan Quest doesn't try to reinvent the 'Diablo' genre, but rather refine and improve the experience, and it held me happily for hours.
(Confession: I played all the way up to the final boss battle, got more or less one-hit, quit, and uninstalled. If I were willing to run around long enough, gobbling health potions and making the occasional well-timed strike or two, I suppose I probably could have wrapped up the battle in, oh, 20 minutes or so -- or I could go back and level up on all those respawned monsters. But life is short and I have a long queue of unplayed games. In the original release, you could destroy the statues from which the final boss -- Typhon -- draws his strength. Gamers complained this made it too easy, and that option was removed, leaving me still searching for a final boss that doesn't come down to a test of patience, and that maybe acknowledges everything you've done to get there in the first place.)