How can the new dialogue system work without some kind of wonky enemy/hostile npc interaction getting in the way? Unfortunately I think beth will wait until e3 to show this off. I think the new dialogue system will be one of the key features demoed at e3.

The only way that would be a problem is if while not zooming in they still locked the PC in place and i don't think they would have done that.

All that I remember is that NPC keep on moving while talking to you, which makes me happy. I expect it means no more freeze-the-world, close-up discussions (a bad bad thing to throw on us, what with the Oblivion faces).

I don't worry to much about that. Look at combat from Morrowind to Oblivion : they took great pains to make the switching from weapon to magic very fluid. Seamlessness is something they do pay attention to.

I will be hopeful here and say that both you and the person your talking to can walk and move around doing other things. For example fighting enemies.

That's would be very weird to have dialogue be interrupted by a hostile and right after the hostile is taken care of dialogue resumes like nothing happened. This is going to be interesting to see what they've done with it. What's the radius going to be for how far you can go before dialogue ends? If both are you are free to move around that means if you're out in the open in the middle of a quest you can just walk away too far and dialogue would end I guess. I can see many a quest bugging out due to this.

maybe it is like in Oblivion and Fallout, where someone can say something across the room to you, but dont open the dialog

Also, for whatever reason, if the radiant ai bugs out and a hostile attacks a quest giving npc while you are talking to them this would be very hazardous especially if npc's are non essential.

Yup. Interrupt a necessary dialogue by accident, your journal don't get updated buuuut the NPC won't give you the right dialogue again...

Nope, I think you'll be stuck in place till it ends. Like at the end of the DB questline, people talk and act around you while you cannot move.

I don't know how you could not be stuck in place... if you weren't, how you would select how to respond to people?

Yea this too. Not sure how they've worked this out.

Just think of the opportunities, like talking to the husband, and wife jumps in to adds a comment, then the husband turns to answer a customer, while the wife continues with the conversation, until the husband return to it and so on...

D pad to navigate in dialogue menus.

The world will continue to move unlike in Morrowind and Oblivion but you will most likely be stationary with you looking at the NPC and following their movements with your eyes as they continue to do whatever.