I recently installed the Cuthroat mod, and also OOO a while back, and Ive found that most of the NPC's dialogue isnt spoken at least 3/4 of the time. I see it on screen for maybe 3 seconds, but then it skips on. Can anyone tell me how to fix this "mute NPC" bug, or direct me to a patch for it?

If it's new dialogue then you'll either need to create silent MP3 files, or install http://www.tesnexus.com/downloads/file.php?id=16622

Can I just install this like a OMOD or regular mod to OBMM?

OBSE plugins are not regular mods. There is no reason to pack it in an OMOD, but you could. Extract the archive into the Data folder, and it will be installed. (You should find the DLL's installed in OBSE\Plugins.) It requires, OBSE, by the way.