You might ask what is the Talisman?
Well according to blizzard devs, its a feature in your character profile where you can customize your character. The purpose of the talisman is to alter attributes with gems and possible other modifiers.
It is a very interesting topic because lots of people complain about “automatic stats customization” – so maybe blizz have a great solution here. The feature didn’t work under the Diablo 3 BlizzCon demo.
Description of picture: In the middle of the character profile there is a circle (the Talisman) with 9 slots where you can put gems into it.
Please posts your comments if you know more about the Talisman 
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Testniere
Depending on the number of possible modifiers this might lead to a very unique character design! Related to D2 this makes 6 types of gems (including skulls) in 5 different stats. Combined with 9 slots this leads to hell a lot of combinations – not even thinking about rune-like combinations…
I wonder wheteher combinations and their results will be depending on luck or whether there is kind of a guideline to combine the modifiers.
Sounds great! Looking forward to hearing / reading more about this!
Michael Galati
Found this info @ diablofan.com
Talisman Gets Cut
Furthermore, the DiabloWiki.com – TalismanTalisman, which was previously a storage device for the player’s DiabloWiki.com – charmscharms, has been cut for the foreseeable future.
The device essentially forced players to allot a specific amount of space for charms, a mechanic and item hold-over from the days of Diablo II, while simultaneously freeing-up real inventory space for everything else found on Sanctuary escapades. The decision between power and inventory space often left Diablo II players with conflicting desires to gather items and to become exceptional and efficient warriors, and so the talisman largely resolved this issue. Bashiok elaborates:
Official Blizzard Quote:
[Blizzard Source]
Well, I can say from feedback and testing we’ve made the decision to pull the Talisman from the initial release of the game.
It was a cool idea at its core, but right now it’s just really too basic and doesn’t provide anything you can’t get from the armor and weapons you’re equipping. It requires a lot of the player to invest time and energy into finding and storing yet another type of item just to add player stats. When they do all that, it’s just to do something pretty boring that they can already do with awesome things like armor and weapons. Originally the Talisman had a much deeper design, but it proved very ambitious and it got whittled down over the years to a very basic +stat per single square. We like simplicity in our designs, but charms became superfluous in their purpose.
We really like the core idea, but we don’t want to stop everything and spend a large amount of time trying to fix the Talisman, although we do have some great ideas already. So, it’ll very likely come back in some form or another after the game ships. And be awesome.
So for now, no talisman. But perhaps we’ll see one somewhere down the road, say, expansion one?