LMAO, I remember this one.
I really did not trust Malborn/Bethesda one little bit, I kept thinking that Malborn was going to make off with all my stuff, so I left him waiting, traveled back to my house and stashed it. To progress the quest, I gave Malborn a token item (leather strip). Unfortunately, Malborns intentions were true and I found myself a little nerfed later in the quest.
@ crw802 - Where is Malborn, still sat down in the tavern at the table? Try a few things: Body bump him a little to move him from his current position. Try crouching and then activating the speech. Try *ahem* doing it from behind.
Also, as I don't know what system you're using, just double check that you haven't got a sticky key/button. <- Dumb suggestion but worth a try.