It is really code done in C/C++. Through the FOSE utility it can be a great addition to all our mods. Basically, the conversation of random npcs can become real-like. RLD is REAL-LIKE-DIALOG. What do I mean by this? I mean your conversation options can vary greatly and depend on what you say. A sort of conversational history can happen between the player and any npc, but you don't need a dialog writer. But what the npc tends to say and how it react to what you say will be guidable by parameters. how ever it will never run out of options.
It isn't too good to be true. On the otherhand that may mean it is already out there. Let me know if you are interested and I can share some details later of how RLD is accomplished.