Although creatures in OB can't talk, statues can, and the Arena announcer can, so I don't see much problem with the talking part. What I do have a problem with, is starting the dialog.
I need a way to click on the creature and start a conversation, in the same way you would with an NPC, with the intention that it should be as much like an NPC dialog as possible. Anyone have an idea?
Actually it's that "when activated" part I'm having problems with. I need to activate the creature without the game thinking it's an attack. Invisible NPC for the dialog is something to look into, though.
Activation is different from attack key. Generally, activating a creature is utterly ignored in my game. Can't even get a "moo" out of a cow like Diablo.
That said, I'd wonder if you could have an "onactivate player" block in a script on the creature (assuming a unique creature). If not, perhaps using OBSE's getcrosshairref function in a constantly running quest script that disables the activate key when looking at the creature, monitors the control for the activate key and starts your dialog if it is pressed while looking at the creature (with a distance check to ensure you are close).
Using 'OnActivate Player' in the script and attaching it to the creature works fine for me. Assuming that this is about a specific creature you added who you could add a script to and not creatures in general.
Then you'd be able to get the script running by having the player activate the creature with the normal activate key, the spacebar by default.