I've been thinking about this for years and keep building up this idea of the "perfect" TES game in my head. I thought it might be fun to start a thread where everyone can post features/ideas that would be included in their dream version of TES. I have a LOT to say about this, so I'll add each major feature/idea as separate reply as I think of them.

Here are the rules:

1. Pretend Bethesda has no resource constraints for creating the game. They have unlimited budget, time, and man-power. Remember, this is the "dream" game, so the sky is the limit.

2. Your feature has to have a somewhat plausible way to actually be accomplished. Don't post stuff that is obviously impossible to make given unlimited resources (i.e. "plug me into Tamriel like the Matrix").

3. Bethesda is not a hardware company. Include things like support for existing hardware that is available, but not stuff like "Bethesda should build a special device to …"

That's it!

NPC's Affecting the World
It's been mentioned already on these forums, but have you guys ever played the Real Time Settler mod for Fallout 3? The idea is that you could gather resources, hire NPCs, and build/manage your own settlement. You can create buildings, shops, set up guards to patrol and keep your people safe from attacks, etc. It would be great if TES took this to the next level. For example, how does the local blacksmith make that sword for you? Well, he needs ore and leather. How does he get those things? Trades with the tanner and the miner. How does the miner get those things? They actually go out into the world and obtain them. What if there are supply shortages? Then the blacksmith can't make new equipment and tries to encourage other NPCs (or the player) to pick up the slack and go find needed materials. And yes, the Count of whatever city you are in should do things like set tax rates, local law, hold court, manage trade policies with other cities, and build improvements around the city. I want to walk into a city and see how it has changed over time because of the NPC's that live there.

Skyrim is my dream

But seriously.
Really in depth NPCs, completely destructible/regrowing environment, completely customziable armor/clothes + a huge amount of them...

the list can keep going, i'll post later when i get more ideas

Why don't you just go play a settlement simulator?

Steal AI from "The Sims"
Have you guys ever played The Sims? My girlfriend plays it all the time and it's actually a really impressive game. The Sims characters have personality, hopes, dreams, fears, ambitions, flaws, preferences, and all kinds of other character traits that make the feel "alive". Best of all, these characters are dynamically generated by the game, so there is an endless supply of them. I would love for NPCs in TES to be similar to this. Sims interact with each other in life-like ways, and they even remember. It would be great to interact with TES NPCs by asking them about their hobbies, what they do for a living, what kind of food they like, etc. Maybe some NPCs that you become friends with will let you "crash" at their place instead of having to pay for a bed at an Inn, or invite you over for dinner. The possibilities are endless!

Support for Eyefitiy + TrackIR + Razer Hydra
I'm really into a military simulation called ArmA (Armed Assault), which is a super-realistic military simulation, a version of which is actually used by various militaries around the world for training. One of the coolest things about the game is being able to play it with a hardware tool called "TrackIR" http://www.naturalpoint.com/trackir/

You know in most games, moving your mouse not only moves your head, but your arms, where you are aiming, and your torso as well? Not in ArmA. With TrackIR, your head moves your head, and your mouse moves your hands/arms/aim. You can look left, but aim right. It's an incredibly immersive experience.

Combine the above with Eyefinity support, so the game can span across multiple displays, and then add in support for the Razer Hydra: http://store.razerzone.com/store/razerusa/en_US/pd/productID.228849000 so that you are swinging your sword and holding up your shield with motion controls.

This would be an incredibly immersive experience, and all of the hardware required is available now. All it would need it support for it in TES!

All of tamriel and then some.
or complete civil war between all provences
and your lead cyrodil and are at the biggest dis advantage being completely surrounded

or tameriel vs a whole other nation/world

I think it would be cool if you can go to all of Nirn, all of the city's have 100's if not 1000's of NPC's, they could create some type of A.I that randomly generates interesting NPC's and quest's and could take voice samples from all over and give them to these randomly generated NPC's.

The "Big World" feel of Daggerfall is what made it my favourite TES game, so my dream game would be something like that, on steroids.

Hundreds of thousands of locations, millions of NPCs. I agree with the Sims AI technology mentioned above. I mucked about in Sims 3 for a bit and it was certainly impressive on that level. You combine those two and you'd have a game that would be amazing. A true living, breathing world.

On top of that, I'd love to see an active, in-depth political system. The intrigue and conflict of Morrowind's Great Houses is one of the series' high points and the fact that they haven't replicated it is a real shame. If they could take that to the next level - plotting the fall of other factions, taking down other guilds or important people. One of the highlights of Morrowind for me was with the mods Dracandros' Voice and Rise of House Telvanni - the latter gave me a quest to eliminate the head of the Mages' Guild, so using the former I recruited two or three high-ranking Telvanni hanger-ons, went to the Vivec Mages Guild, eradicated the place, and teleported out of there. The chaotic conflict of powerful mages blasting each other to bits to crush the Mage's Guild was a fantastic experience.

A game designed for the PC, ports for the consoles being an afterthought (if that). Preferably, the kind of PC game that just cannot be ported to any existing console, due to its sheer depth, breadth and beauty.

Actually, a game intended for play on high-end gaming PCs.

Look and feel like unto Morrowind's, but for the 22nd Century. An unprecedented vast world* (we are talking multiple Blu-Rays, or simply a stupendously large download, here!) Living, breathing NPCs, creatures, relationships, interactions, plotlines. Plausible actions, reactions, consequences. Gameplay, graphics and sound designed for deep character-based, story-based and world-based immersion. Gameplay that challenges all characters, and all players - there will be times you must think, and times your character must react fast (and appropriately), for example. Social and political realities and complexities, certainly. Ecosystems, too. A world that ticks on by on various levels and in various ways, whatever you do (or decide not to do), with beings actually doing things that have knock-on effects, constantly. Many "ticking clocks" throughout, some of which might well coincide/overlap. Ah, the choices we must make! And yes, consequences too...

A beauteous, thought-provoking, moving, awe-inspiring, revolutionary, one-of-a-kind monstrosity of a game.

* Nirn, let us say. Oh, and the rest. Worlds (plural) - why not!

Morrowind, as narrated by Morgan Freeman.