J.E. Sawyer Social Interview, Continued

Obsidian Entertainment designer Josh Sawyer continues to answer fan-submitted questions over at formspring.me, with his latest responses addressing NPC dialogue, the concept art BioWare created for Dragon Age: Origins, what he'd work on if he could "do his own thing", and more. Here's something to get you started:
Do you have any particular approaches to NPC dialogue/chatter to help with immersivity and without them coming off as useless bots, taking up space, and never adding much lore or relevant information?

I am a believer in what Obsidian calls "barkstrings". Generic, rank-and-file characters in the world typically do not have full dialogue trees. Instead, they have a large list of reactive one-off lines that they will say either in passing or when you interact with them. As long as barkstrings react to things in a meaningful fashion, it's usually more satisfying than drilling generic characters for generic information through a dialogue tree.

Background characters should also be engaged in meaningful action. A world where people endlessly, randomly mill about feels like a world without purpose. Communities should have a focus and characters within communities should have roles that they fill.