I have several NPCs assembling into a tavern with travel AI packages, most sit down at the tables in the tavern but one stands in the middle by an xmarker. I want this NPC to give a speech to the rest of the NPCs and player, but I don't know how to go about doing this. I've only worked with dialogue so this is all new to me. Do I somehow use the conversation tab in my quest to set up the sound files for the speech? Also, I would like the NPC to use certain dialogue animations like waving their arms around and stuff.

I think I've seen this done in vanilla oblivion I just don't know how. Help is appreciated

not sure, but you could look at the quest where Martin gives his speech to the blades in the CS. You might find some help there/

Might want to give this part of the wiki a look
http://cs.elderscrolls.com/constwiki/index.php/How_do_you_set_up_a_scripted_conversation_between_two_or_more_NPCs%3F#Another_Strategy_For_Speeches_and_Conversations_Between_Multiple_NPCs

You'll need to setup the idle animations within the gameplay > idle animations menu in the CS, and use conditions and pickidle to decide when to have an NPC use that particular action.

It can be rather complicated and in many cases hard to do if you don't have the ability of voiced dialogues, so expect to spend lots of time working it out. You may even want to create a small mod which just tests the mechanics so you don't screw up your mod in progress too badly.