Playing The Elder Scrolls IV: Oblivion the first time, two events stood out: 1. Approaching an Elvish ruin, a brigand came from within & attacked. As we fought, a giant mud crab walked slowly up, & attacked him from behind. Not knowing what was going on, the brigand freaked out & ran away, leaving me to face the mud crab! 2. Entering a small Inn, I paid for a room & started up the stairs. Halfway up, I heard an argument among the NPC's. One shouted "Thief!", then I heard sounds of a fight. I was stunned. I hesitated for a moment, then went back down to find everyone but the Innkeeper lying dead! I'd never seen anything like it. I was totally enthralled. Later I read about, & witnessed, how each character in the game (there are hundreds) would go through a daily routine & even travel from town to town. I also read about a problem during development where a prisoner that you need to talk to during a quest was found dead in his cell. It took the Devs awhile to find out what was happening: The guards would run out of food, then kill the prisoner & take his! They corrected the problem by giving the guards more to eat. I believe that's still ground breaking A.I. It has limitations, but is still impressive. As to NPC's acting human, not all are human. Naturally, they should have their own unique racial, cultural, & environmental motivations. That, & more flexible & believable dialog & interactions will make great AI, imho.