I'd love to see a way to customize NPCs in the game through the showracemenu interface, or something like it.

The possibilities of updating Lydia's look, and some others would be great. Obviously introducing race changes may cause some issues, but even if we had access to the visual sliders for an NPCs given race that would be amazing.

Is it possible? Anyone else interested in this?

I think the best you're going to get is the ability to customize their look via the editor when it comes out. And that's a better alternative anyway. The Show Race menu would work for one set of saves, but if you ever made a new character those NPCs would revert back to their default state and you'd lose all your hard work. But with the editor, you can make a single plugin that contains all the changes you want, and they'll be that way forever. Even better, your plugin can be a perpetual WIP, so when you come across a new NPC whose look you don't like, you can just load up the mod again and make another change.

Ok cool thanks. By editor, do you mean the Construction Kit out in Jan? I've never really played around with the previous Oblivion CS so I didn't even think of this. In the OB CS I see you can use the Face Advanced Tab to edit the NPC looks, but I'm assuming this doesn't give visual/realtime feedback?

It sure does! I don't know how the Skyrim CS will work, but in Oblivion, you could even click your mouse on the face and nudge bits and pieces for even greater fine-tuning than the in-game character creation. Assuming the new editor is as user-friendly as the old ones (in some areas, not all) you should be up and running and changing NPC looks in no time.