No to first, Yes to second.

The first (infinite) option would likely become too repetitive eventually, and would lead to too many dead named NPCs. They aren't going to respawn you know, and no-one is making babies to replace them. The towns would become eventually deserted (only generic nameless characters, and essential characters remain).

I think anything that happens in the world after all the quests are done which makes it feel like a living environment would be a good thing...

I dont necessarily want to see major events which have a huge effect on the world, like the goblin attack scenario...but just an occassional encounter in the wilderness with someone which could be acted apon would be nice.

For example..running across another adventurer who is on their way to a ruin somewhere, the option being going with them or just moving on...or maybe finding a body in the woods with some kind of small encounter attached to it...or helping some settlers in a remote area to find a lost companion...that kind of stuff....

Of course all these things could be ignored,or played out at your discretion and would keep the world 'alive' after all the main stuff is done.

I would like to see that kind of thing,which could be randomly generated I think, only happen if there was no other quest active at the time...

And, with them being of little or no importance to the larger world picture/story,it would simply add to the feeling that stuff is still going on that your character can get involved in.

Agreed.

Honestly, I'd hate it if some villager came asking for help for the 20th time in the past 30 minutes. However, it would be silly if randomly generated quests were given to the player at such a frequency. I highly doubt that these quests would be given at a quick pace, and with that in mind, I highly doubt that these quests would be guarenteed boring simply because they aren't "hand-crafted". Not to say that there shouldn't be any hand-crafted quests, in fact, there should be many more hand-crafted quests than random quest templates. I haven't seen this system in play yet, hopefully in E3 we'll see something on this matter.

What I'd like to see are random/side quests appearing in the players vinicity, or in a certain place only after the player discusses rumors. These quests can range from combat-oriented quests to quests of an economic nature. Here are a few quests which I had in mind:

• Combat - These quests could be of the rescue, exterminate/hunt, and attack/defend varieties.
  
• Economic - These quests would be simple quests in which you could use your skills to obtain an item(s) for an NPC or village, be it an artifact or various metals.
  
• Guild - These would only appear once you've joined a guild/faction. Things like Dark Brotherhood assassinations, or obtaining alchemical materials for either of the mage guilds.

Quests along those lines. Like quoted above, the key to the success of these types of quests might depend on the frequency in which they appeared. Also, certain repeatable side quests, like obtaining furs for example, could possibly be tied to a specific NPC. Killing this NPC would result in someone else giving the quest, until there are none left, in which that quest for that area is lost.

These are just my opinions on the matter. I believe these quests could spice up the game, so hopefully there will be a few.

Agreed.

I also am not really for tightly timed quests.

As to the consequences, as I said, I would prefer they not be dire, in most cases. The Goblins would attack the village, or city, for example, but not actually get into the houses where the villagers are holed up. Perhaps you would find them raiding and looting whilst the villagers cowered in their homes, or besieging (but not actually breaching the walls of ) a city. Something, again, to keep the gameworld living and plausible without going to such an extreme that it would actually damage the world by diminishing its population.