When I was reading about it, before the release, the premisse seemed valid and I was curious. After a couple of days I have to say that it seems like a good intention, but (for me) doesn't work. Some thoughts on the subject:

- Dialogues on top of dialogues: A lot of plot essential dialogues, the ones that set the mood for the game, are done outside any dialogue system whatsoever, like the first one with the Jarl of Whiterun, when a guard comes in telling about a dragon attack. That is a good idea, the flow seems fluid, interwoven with the rest of the game. My problem is that, the way the game works, a lot of things can interfere with you enjoying the plot. In said example, I had the son of the Jarl walking in the middle of a very foreboding dialogue saying something like "Another person come to lick my father's boots. Good job..." together with a guard making a general comment. All of those lines just being blurted out together (as great as they were) got in the way of me enjoying the mood of the plot. Not to mention having random NPCs just walking the middle of an important conversation making comments about my armor just seems off.

- Too many balls in the court: Not to mention crowded places like a city square, with a lot of one-on-one interactions between NPCs that not only are a pleasure to listen to, but often times are the hook for a quest started by one of them. Again, good premisse, but I ended up trying to listen - at the same time - to a beggar asking for money, an old lady being bullyed by two members of an oposing clan and a woman trying to talk to me about starting her own business. Too much...

- Losing control of how you wanna flow through the interactions with multiple NPCs: Because the dialogue doesn't stop the outside world, but locks you in it, when you're approaching a group of people it can be sometimes weird. I was arriving in Whiterun for the first time, loving the game, wanting to explore every nook and cranny. I bumped into three members of the Companions and helped them kill a giant. When I started a dialogue with the Huntress the rest just resumed their NPC script and walked away. When I was finished with her I wanted to talk to the rest, but they were already way ahead. Not a major problem, but just annoying (again, for me) in game mechanics terms. Too many times I approach two NPCs that, after a dialogue between them, each have different insights on a subject. Because I'm locked in one dialogue, when I'm done with it and try to look for the other, often times they disappear inside a locked house. I can understand that this is more realistic, but frankly that's one of those things that, yes it is more real, but no it's doesn't make this game better (third time's the charm: in my opinion).

- Bulky scenarios: Even without subtitles, you have the dialogue box with the options to your right, NPCs (even Companions) sometimes getting in the way or even standing between you and the NPC you're talking. It just seems like too many distractions to really care about the conversation.

The premisse of making a game more realistic is awesome, but I respectfully feel that Bethesda sometimes makes too much effort on a subject that ends up killing the essence of that same subject. Dialogues in a game are essentially made to put us inside the story, to make it an experience past the hack'n'slashing routine. I can understand that, given the basic and previous Elder Scroll mechanics of one-on-one paused dialogue versus watching dialogues with more than two people but not interacting makes it for a limited array of options. However, Morrowind and Oblivion for me ended up providing a more enjoyable time (at least in that respect).

In the end what kills me is that their writing is very good, with great lines and such, and this new dialogue system feels like a step back. The "realism" issue is a valid goal, but sometimes we can create situations that just get in the way of what, in the end, should just be a game.