IMPORTANT: From an anolysis of the map available, assuming that the cells are the same size as Oblivion (likely since they fit with Todd Howards summary of the map size), the city layouts are roughly the same size as the average Oblivion city.
-More compacted cities and less empty space. One surefire way to make a city feel empty is to have lots of open spaces. Even with them being the same size, they can pack a lot more into a city by having thinner paths between buildings. You could probably get 30-40 buildings in the space tha in Oblivion gave you 15-21. Bruma was the smallest city in Oblivion spacewise, but had more houses than some others. This also makes it feel more crowded, even if there are only a few NPCs there. Many of the cities in OB were more like suburbs or large towns.
-More streets. Even if they are short streets, making the player search around a twisted maze makes it feel much more metropolitan and larger. It makes it feel rather minute in say, Anvil, when I can go past every building in the city without taking a side route and can see the opposite gate upon entering.
-More NPCs. It may have been due to poor engine efficiency in Oblivion, hopefully it will be better in Skyrim, but there was barely anyone around in Oblivion cities. With extra houses, this should come basically by default, but also increase the average number of NPCs inside each home and put more beggars around (many people went without homes in medieval times). Also, make them go out more, so you see them wandering the streets, chatting more often.
-Make NPCs take part in activities. I am confident they will have this, better AI and some mention of festivals in the magazines. It will be nice to see NPCs get into (harmless) fights, children playing games, people working, NPCs actually going into shops and purchasing items (or at least appearing to). Also, things like market stalls outside on the street so that you can see it even at first glance.
-Spread out shops a bit more. One of the big reasons to go to cities is for the shops that are available. One thing that bothered me with the IC was how they were all in one place. It's fine to have a central market district, but also spatter a few shops (other than taverns and inns) around the city.
-Give every NPC something to say. It's not hard, honestly, and makes them feel more real. There is no good reason someone should put all that effort into designing an NPC with a home, schedule, stats, inventories etc. and then not give a basic bit of info on them.
So, yeah. What are your thoughts?