Khajiit: Have you heard? The chapel in Anvil has been attacked!
Guard: No. Whats happened?
Khajiit: All of Dibella's priests and priestesses.... murdered...
Guard: NO!!
Guard: Have you heard? The chapel in Anvil has been attacked!
Khajiit: No. Whats happened?
Guard: All of Dibella's priests and priestesses.... murdered...
Khajiit: Leave me alone!
^^^^ REAL interaction between NPC's.
Has it been confirmed as to whether or not NPC's will speak to each other intelligently?
The above is merely one example of many ridiculous conversations you will overhear,
and I'm concerned that this annoying feature will make a return in Skyrim.