They made Fable: TLC because people thought Fable was to short... some people think they made it just to keep us from complaining about the long wait for Fable 2...
Fable: The Lost Chapters has added quests and levels, with the game continuing on for some time after the ending in the original Fable... along with more weapons, clothes, hairstyles etc. as Vegeta mentioned... these added features were the "lost chapters" of the Fable story, if you will... so Fable: The Lost Chapters is just the...I guess you could say... more complete version of the game... though a lot was still left out that I would have liked to play with...
Truth be told there was a lot of content left out of the original Fable that was included in The Lost Chapters but there was even more ready to be added that wasn't.