So I decided to level my Sneak skill, and I read sneak attacks with melee weapons really help. However, I am unable to perform one. Right now, I'm in Mzulft fighting Falmer, and even though they don't see me (the Sneak meter is a straight horizontal line), I don't get a "Sneak attack for x2 damage" message like I did when sneak attacking with my bow. What's wrong? Is it because the Falmer is fighting my companion? Does my Sneak need to be higher?

sneaking with companions seems random for me i sometimes get the sneak damage but other times i don't. If your going to sneak i highly suggest you never use a companion

I think it is your companion fault. The falmer is in combat mode so even though he don't see you, he will be expecting an attack.

When shooting arrows the guys are just idle and minding their own business. If you create a new character and beat up your tutorial character of choice, you will find out that you have to wait about 5 secs outside of combat still while hidden to do another sneak attack or else it just a normal attack. I believe you simply can't do a sneak attack while in combat.

Good to know. Thanks for the info, guys.

Companions are a bane to a sneak character.

put yourself in the warrior place. can you do it without noise?

Mine can.

I mean in real world. this is about the reality!

Depends on the treatment of the armor, then. Oiled joints and some cloth/leather between plates that contact each other under normal circumstances would dramatically reduce the clank-clank of a suit of armor.

May also have to do with the fact its a Falmer. Falmer are blind but have enhanced hearing. I have been able to get sneak melee attacks on bandits while they were engaged in combat with my follower. Doesn't always work, but I have gotten it to work sometimes if I sneak up behind them while my follower was attacking from the front. But yeah, followers are not terribly good for sneakers.

Falmer are about the most difficult enemies to sneak up on. I don't know if Muffle will help, but if they hear you, you are detected.

Hagravens seem to be quite difficult, too.

I sometimes use Throw Voice (the shout) to get them moving into a direction and then get in their back and stab them.

Muffle will. Also invisibility breaks combat with them (which it should not)

Falmer are actually a joke for all my sneak characters- you are having trouble sneaking on them? As a vampire with muffle and high sneak I have stopped "sneaking" altogether recently and just run around invisibile, the silence is good enough to avoid all detection so you can just drop into sneak(at the last second) for an attack, or just start the intiative with a swing.

Edit: I believe there was a thread concerning exactly falmers and detection factors in the spoilers section not 2 days ago. I posted some general stuff.
Edit2: yup- here it is , but it is in the spoilers- beware! :: http://www.gamesas.com/topic/1349067-visual-detection-by-falmer/page__fromsearch__1