I want to simulate an effect where an NPC (or the player) wearing full heavy armor (or just carrying a lot of weight) would go into the water, and would then sink and drown. I'm thinking the best way to do this would be to set an NPC's speed to 0 (or just very low) when in the water if they are carrying over X% of what they can carry total. However, if someone were on the surface of the water, the most this would make them do would be to freeze them on the surface without being able to move.

Does anybody know how I could make an NPC or the player sink automatically when they are in the water?

I'd really like to know this as well. I'm not sure how it could be done.
You might be able to detect the location of the ground beneath while swimming and force the actor against it, but you would still be using the swimming animation and be unable to jump.
Anyone know if ToggleSpecialAnim or something similar could be used at least to replace the swimming animation?

I've come across some information that leads me to believe this is entirely possible.
Like I said, find the location of the ground beneath the actor and lock their vertical movement to it, then use ToggleSpecialAnim to override the swimming animations with walking animations.
The player won't be able to jump underwater though.

Interesting. I'll try that out. I've always been annoyed that enemy NPC's would never drown because they would always go to the surface for air, and how the guards could swim for ages with their armor on.