So I'm kinda concerned about how the new dialogue system will work out. In the new interview with Todd, he said,

"We're also doing some side characters with personality that don't give you specific things to ask about, but just respond to you activating them. Activating them again is interpreted as "tell me more", so we found we can do quick conversations with the player this way and really fill out the world more."

Does this mean that we won't be able to choose what we talk about? If this is the case then does that mean we won't be able to make decisions? Maybe I just don't understand the new system but I'm kinda worried now

some side characters with personality that don't give you specific things to ask about

Sounds like the Fallout 3 nameless NPCs (settlers), who would just give you a one liner at best. I was pretty much expecting this, but it will allow them to have more NPCs in towns to make them more realistic to a point.

Ohh Ok that clears it up a bit

'We're also doing some side characters with personality that don't give you specific things to ask about, but just respond to you activating them. Activating them again is interpreted as "tell me more", so we found we can do quick conversations with the player this way and really fill out the world more.'

Mostly non-important npcs won't have much dialogue options. (Think Fallout 3 megaton settlers)

Only some NPC's will be limited to no dialogue choices.