I'd prefer a Mass Effect or Dragon Age style, where you choose the tone or way you want the conversation to head, and your response is voice acted and you can see yourself talking (if you want, those games are 3rd person, so I guess you could have the option of using 1st person for dialouge, but still have the conversation acted out) I think if it is done right it wouldn't even mess with modding. And scenes where you are discussing something important would be way more interesting, and you could even talk to more than one person at once (because apparently no one does that in TES lol).
Anyways, don't hurt me, just an idea that probably wont be implemented in this series ever.
No poll because this forum already has too many lol
EDIT: Forgot you were muted in Dragon Age, but I like that style too.