I can start a conversation with a character (with which I have to be stood directly infront of them) and I can't hear the NPC talking. I have messed with the audio settings and it still isnt working.

To counter this I have to move backwards away from the NPC and turn so I'm not facing them just to be able hear them,

I have also turned on subtitles but the resolution is so small its hard to read from where I am sat (1080p from about 8 feet away).

I had installed the disc to my HDD and tried deleting it to no avail.

Any ideas?

Are you using a 5.1 setup with a center channel? Quite a few people, including me, are reporting no or little sound coming through the center channel, where the NPC voices should be.

Im just running it in Stereo so theres no reason behind it.

I will have a play around with my sound settings I think.