A few words on the Radiant A.I.
I've made a mod for Fallout 3 (Paladin Cross Variety) in which I've tempered with what the Radiant A.I features, namely schedules/tasks at specific time and under specific conditions, etc. The engine and the Radiant A.I was upgraded from Oblivion (for Fallout 3) and so was the Radiant A.I (although they never really advertised the Radiant A.I's "augmented" features for Fallout 3, curiously). I can easily and safely say that what the Radiant A.I is technically capable of is quite good, there's a level of complexity in what it can do on paper that almost no other games out there in the same veins can achieve. They (Bethesda's coders) really did create nice features under the label of "Radiant A.I", its name may make it sound like it's the Skynet of video gaming, some kind of A.I that's supposed to be "so smart" as to be self-aware and do things on its own based on real-life like needs, that's just perception and honestly "Radiant A.I" (the name, and its advertisement) was just a marketing coup that didn't quite end up as Bethesda wanted, although it did create hype at first glance, that's until the game was released and people realized how much of a failure it was.
The thing is that the "failure" in question aren't even the Radiant A.I's features themselves, it's the very lack of usage of those features by those who created them. The point is that most Oblivion and Fallout 3 modders out there who've been modding the A.I of any of those games (or both) will be able to do way more then the developers themselves did with it, not because they are "better" then the devs (although, I guess it may be the case sometimes), but simply because they have no deadlines, no time restrictions and they can explore the entire set of features that the devs created themselves, and as I said earlier they did create nice features that we (modders, in this context) only need to use. The Radiant A.I's features could basically recreate STALKER's zones with "wandering" critters/NPCs acting based on "needs", it's a set of features such as "Sandboxing A.I", "Guarding A.I", random interactions with available triggers in the immediate environment, a chosen radius of action within which specific tasks can be achieved or forced by scripting, I don't have the vocabulary that a coder would use to describe the mechanism of the Radiant A.I, but I can assure everyone in doubt here that if the developers actually use the entire set of features that do exist "under the hood" then Skyrim will have a respectable, perhaps even borderline revolutionary A.I (at least for the type of game that they make).
I never modded the A.I to the same extent in Oblivion as I ended up doing in Fallout 3, but I did get back in the Construction Set for Oblivion months after I had finished my Fallout 3 mod, and I could immediately notice the differences in the Radiant A.I's features between the two. What Bethesda advertised for Oblivion was possible on a technical point, the features to allow NPCs to "welcome" newcomers in their home/shops exists, those to allow NPCs to target a specific entity (like the woman's dog) and cast a specific spell due to a specific condition (like the dog barking) was (and still is) possible, and they've done it for that "ad", for the advertisement, but non-modded (vanilla) Oblivion has approximately 1,000 NPCs, all unique, if they had to do what even I did for Paladin Cross in my mod for Fallout 3, to all and every single NPCs, to make them do different things everyday, every hours, every nights, every mornings, eating something different, occupying themselves differently each time they want to have a "break" out of their "work", if they had to travel from town to town (which is possible, by the way), then believe me, the game would not have been released until one or two years after its original release date.
It would have taken way too much time, and perhaps even too much computational power from the 360/PS3 (I don't know if it'd have been the case, but the engine had limits and it's a fragile engine, I can confirm it easily, if there's too much going on it's going to screw itself up soon enough). It's as if the developers had tempered with the original roots of the engine and built up so much new branches leading to so many new leaves everywhere that it just couldn't sustain itself, they milked it a lot and I believe that (according to what I've done in my Fallout 3 mod) they knew all too well that the very features they created for their cherished Radiant A.I were too numerous and perhaps complex to use in their entirety and across the entire NPC population of the game. That's for Oblivion though, why it "failed" is explainable that way, it's clear, it's right there, if you're a modder and open up the Construction Set and go check out for yourself what are the actual features of the Radiant A.I you'll see what I'm talking about, it is a good A.I if those features are used often and if values are different for each and every single NPCs in the game you'd pretty much end up with a real-world simulation (figure of speech).
In Fallout 3's case it's better, but the same problem occurred (although to a lesser extent), and that is the developers not using the whole set of features that they've created during the development of the game. As an example, it'd be completely possible to create a new NPC (along with a house for him/her, the proper furniture and so on) in the game's world, anywhere you see fit, and give that NPC a "life", tasks to accomplish, and they can be complex enough (especially compared to many other games out there, of the same type or not), you can make that NPC leave his/her house and travel to specific locations that are existing in the Construction Set, or create new locations for that NPC and give him/her schedules. That NPC could have three meals per day, go sleep and wake up (at any specified moments in the CS of course), do specific actions at newly-placed triggers in the game's world, force the NPC to "have a discussion" with other chosen NPCs, apply various flags to increase the variety of actions.
I mean, if each NPCs in the game had a complex schedule of tasks to accomplish it would be amazing but they don't have the time, which is a little ironic, since they did take the time to create the features in question, but they themselves barely used them in the end, I don't quite know why that is. At first I thought that it was for us modders, but then most modders don't temper with the A.I in any way, shape or form, they usually make new textures, models and sounds. I honestly think that the devs had good intentions and they do have the coding talent to create a good set of A.I features, I've seen it with my own eyes and I've tempered with a portion of their work, I know what it can do on paper, and therefor in the game, but only if it is used fully and as intended.
So, the bottom line is this, the Radiant A.I is good, but it was never fully exploited, and its advertisement for Oblivion came at a time when most A.I in similar games could never achieve anything near what we saw, which created a lot of hype, perhaps more than usual, too much of something is like not enough of something too, so after its release people were disappointed because they expected to see each and every single NPCs do things like we saw in the video with the woman, the visitor and the dog, but everywhere in the game without exceptions, that was just asking for too much. I hope that it will be different with Skyrim, I honestly hope so, but I highly doubt that there will be wide-spread use of complex A.I behaviors in the whole game, we might have a few NPCs here and there doing more things than others because the devs took the time to "develop" those specific NPCs more than others, just like in Oblivion and Fallout 3, but thinking that it will make every "living entities" in the game act differently than others and be completely unique is just dreaming in colors in my opinion.
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