Fallout 3 I found to be very much more interesting to explore (especially now with high res mods for Fallout 1/2, and my personal favorite fix that lets you scroll your view to the edges of the map without being bound to your player - all my exploration in the originals is done with scrolling over the map.) But, "desolate" and "barren" don't really come to mind when I'm exploring Fallout 3's Wasteland. To be fair, the scope of the game is much faller and it's centered around a metropolitan city (and we can assume it was quite a populated area by 2077.)
Ideally, maybe there's something to be learned from both games. I'd like to see a way that conveys the vaste and oppressive desolation of Fallout 1, with the highly detailed and exploration-centric focus of Fallout 3. I thought FalloutChris' idea was interesting, actually - having a procedurally-generated span between towns to optionally pass through. This does sound to me like an interesting way to incorporate random encounters during fast-travel, for one.
As it seems there might be some logistical problems with trying to add that element directly into a setup like Fallout 3, where the entire world is pre-defined. As there's no specifically isolated areas where you'd be guaranteed to not contradict what's already there with the random element. This has been discussed at length previously, but while I think there might be workaround with being able to "pop" the player back into the game world only when passing through pre-defined areas, it still seems like there might be some problems.
If the game already had a game mechanic of loading in procedural cells between key areas, then when you ran into a random encounter you could easily "pop" into one of those procedural cells without it being a jarring experience that felt separate from the rest of the game. (And you wouldn't run into the "exit area" problem if you just "popped" into an instanced area completely separate from the rest of the game map.)
That said, it might be one of those things that sounds better on paper. I can think of a couple of problems with that idea. For starters, I do think you'd end up losing a certain amount of consistency. (As in, the things you ran into travelling from Megaton to Rivet City wouldn't be the same things you'd pass on the trip back.) The game would be less about "exploration" in the traditional sense ("I wonder what's in that interesting building I saw on the way"), but "let's wander around and see what randomly shows up." Kind of a minor difference, and I'm not sure what I'd prefer, really.
Also, it could concievably lead to some level design head-aches. Deciding which locations you wanted to be permanent cells, and which you wanted to incorporate into the procedurally system as something randomly encountered. Or coming up with ways to allow the player to re-visit interesting areas in these transitional cells. Or just trying to properly balance the entire game map in general and provide enough interesting things to run into.
Still an interesting idea, though. It's one of those things I might have to actually see in action (in a current-gen game) to really judge properly.