Re: Looking For Input On Potential New Fantasy Product
I think that the second option would lead to brand confusion. It also seems to me that Hero has been doing the core rules + genre books for some time now, and it (at least currently) is not a sustaining model. While true herophiles, who like to buy everything, may see duplication, we're not a big enough group to sustain sales. A complete game, without reference to another (non-fantasy) title would let new players pick up the one book and go.
So my vote is for Fantasy Hero Complete. I also agree with previous posts that the book should include a spell system that can be used out-of-the-box. We all know who the big contenders are in the fantasy market. While Hero isn't class-based, perhaps some short examples (maybe in the extra PDF you mentioned) could show how to build the basic stereotypes.
I also think that, if you go this route, there should be some planning around how to market the extra materials that many players of other systems expect to be available. Like the Bestiary, a Spell Book, etc.