I had to install a crap-ton of mods to get rid of all the ugly people in Oblivion. I don't think they were deliberately designed to look like ugly people, it's just those were the tech limits Bethesda was working with at the time.
I certainly hope the screens we've seen so far is an indication that the NPCs will be much more appealing in Skyrim.
If the Creation Engine is sufficiently advanced to allow different kinds of body types with fat and skinny and realistic looking ugly people, of course, that would be great.
But if not, I hope the character designers will be able at least make the faces
(1) more realistic than Oblivion (as in, more human looking, not necessarily any realistic ratio of beautiful people to ugly people)
(2) more aesthetically appealing than the Oblivion faces; and
(3) sufficiently different from one another that you don't feel you keep talking to clones of the same Altmer or Dunmer etc. in every city.