The gameworld is about 130,000 km^2. That's about the size of England.
With 100 speed and no equipment, it would take you approx. 25 hours to run from one corner to the opposite corner of the map.
I'm curious about people names now. I'm fairly certain merchants are generated, but they could be static at start, but generated when replaced by a quest event. There are certain people in certain castles whose names are static (main quest people), and the layout of people in the castles is static, but what about their names? I'll have to check that. But the only real difference between the main quest people and everybody else is the scripts that are linked to them... nothing more.
Outdoor NPCs are randomly generated on the fly, with random names.
Indoor NPCs also use the random names; however, are static. Every single one. Just like towns and dungeons, they look the same and have the same names in everyone's game. (exceptions are indoor NPCs generated for a quest)
For instance, go to Daggerfall, The Yeomton Farmstead. Inside the house you will find Agrane Yeomston. He is a noble looking gent with a staff and a scroll. He is useless and not used in any quest in the game, yet he is the same in all our games.
Now go to Ykalon, The Laughing Cat Inn. Inside The Black Helm, go to your right and you will find:
Carololda Hawksley carries the buckets
Mordistair Copperhouse is the innkeeper
Agrore Kingwing is the noble gent
Elyzolda Hawkhouse is the jester
And Morgorya Moorwing is the comely woman in the hallway.
On a side note, I really enjoy the random name generator in the game.