BioWare has created a combat system that is both strategic and fun, and that's no mean feat. It's also a completely open system, so if you're facing a couple of relatively simple enemies you can just dive behind some cover and take them out with your pistol, old school style. But if you're facing a superior force, that's when the strategy part comes in, making sure that the right members of your party are attacking the most important targets. It's also a case of using the right attacks - knocking an enemy down with a Psi attack, so that a comrade can then finish them off with a clear shot is extremely satisfying.
But the real beauty of Mass Effect is how you approach the game - the story line really does appear to be driven by the player, to a far greater extent than most games. For instance, you can often avoid combat altogether if you choose your words wisely. Whether you try to intimidate or charm characters that you meet will not only affect how they react to you, but will also affect your reputation and personality. If you build up a rep for being ruthless and brutal, you may find that people you encounter are scared of you and will do what you say out of fear, but then they may not take kindly to your attitude and throw down at the sight of you.
There's no definite good or evil side to Shepherd, but you are awarded Renegade or Paragon points, depending on whether your decisions are ruthless or measured. And it's these decisions that can really make a difference to where the game takes you. I'm not going to suggest that every conversation you have and every decision therein will have a definite effect on the storyline, but there are certain encounters in Mass Effect that are definite turning points.