One way to play cooperative is to play the Dragon Expansion with the following rules:
1) After each player has played his turn, draw a number of dragon tokens equal to half the number of players rounded up than place them on the board randomly (instead of on a character's space) following this table: (roll 2d6)
2: Plane of Peril; 3-4: Portal of Power; 5-6: Warlock's Cave; 7-9: Sentinel; 10-11: Village; 12: Ruins
2) The game ends if the following conditions are met:
A) There are 10 or more Dragon Tokens on the board (Red, Green or Yellow). Players lose.
B) The Dragon King has been defeated. Players win.
3) Players may aid other characters on the same space during Battle or Psychic combat, adding half his Strength or Craft rounded down to the result of that other character's combat score. In addition, during your turn you may freely trade any items with any other characters on your space in addition to your normal actions.
4) Characters may spend 1 Fate to move exactly 1 space instead of rolling a die for their move. In addition, Characters may spend Fate during the Dragon Token draw phase to reroll where the Dragon Token is placed.
I have tried this a few times as CO-OP and it is quite fun. I still prefer the main PvP Talisman but its worth a try.