The video is in "inside xbox" on the dashboard.
They are not having problems with the AI.They aren't just talking about radiant story,there on about the radiant AI too.They got new tools with oblivion and tried too much with it.
Example: "A kid is let loose in a new sweet shop,he rushes in and takes as many diferent sweets as possible and starts eating them. He is now sick and wishes he took his time more"
They are saying they now know more than before. They know how to use it better/or when and where to use it the most.
They tried things out in the shivering isles too. Like when you saw the person/AI juggling,rather than just wondering aimlessly. They are saying they can do more of that now,because they understand it better. It's why NPC's in skyrim will now have jobs,like wood cutting etc. It means the NPC's will be more active etc.
This is why i applaud bethesda,the have the balls to try things,all of them might not work out as planned,but it is important. It's important because they can learn from it.....Hindsight is always better. Read/hear the info properly,that interview is no way negative or a worry for skyrim.
Look at bruce's body language in the video,he's as relaxed as one can be. Meaning he isn't worried about the questions. I think they know they have a great game on their hands....you can sense it.