*rolls his eyes at the gloating*
I have read through this entire thread, and it seems to me that many folks like many different options for talking to the dreaded NPCs, and will never agree on one very limited system. That is called being human. I have made my opinion known already on the subject as an RPer. I wish to comment on some of the other suggestions.
Click/talk: The old system. Servicable, easy to use to some, hard for others, and somewhat roleplayable. From a RP point of view, you walk up and look the NPC in the eye and ask your question. 'Clicking' indicates your attention is on them, whether that is with eye contact, body position, or tone of voice. Since it is private, you decide which of these methods best suits your RP. But, as said, it is private, and there is no good way to RP that in a public space. No getting around that with any system besides an open chat where everyone has to stand in line to talk, and everything is 'heard'.
Name/talk/time: The system in question. Ease of use is questionable. For one thing, the names of the NPCs are quite long and very odd. I have seen many people 'talk' to 'Hanrquist' or such without getting him to talk back. The "you will just have to get better at typing and spelling" stand just does not cut it here, and is more than insulting to those who are not so good. Pros? If you know the NPC then it is a good way to start a talk, as it is how an RPer will speak to another real person. However, if you are with others, it is an RP nightmare.
Look/name/talk: This is where you have to be facing the NPC and say their name. As long as you are looking at the NPC, your focus and conversation stays with it. RP-wise, this is better than the Name/talk/time system, though still has the problem of looking away, then having to re-say the name to focus on the NPC again. Not very good for complex RP.
Click/look-to-talk: The shop owner system. When buying something from a shop, you rarely know the person's name. In this system, you click on the NPC to target it and let the system know you intend to focus on it. However, you do not focus until you look at the NPC directly. If the NPC is selected, and you are looking at it within a certain angle, the system assumes you are talking to the NPC. If you turn away to talk to someone else, focus is lost until you turn back to the NPC. The basis for this system is actual RP between people, where they will often face the person they wish to talk to. It may be also called the Look/click/look-to-talk, as you tend to face the NPC to select it. This may be confusing to many new players, so can not be the default setting. **see note
Look/name-or-click/talk: Same as above, but saying the NPCs name anywhere in a statement (or at the beginning or end) while looking at it assumes focus without targeting, and just that statement will be directed at the NPC. No targeting is required. Any statement after that without targeting the NPC will be assumed as not directed at it.
Command: A system creating a 'channel' for talking to NPCs only. This makes some sense to me, since talking to NPCs is basically like tells between players. I suggest /npc, being the obvious choice for talking to an NPC. For talking to NPCs that are close together, either looking at the one you want to talk to, or typing /npc <NPC's name> <text> would suffice. A /npc hotkey would be a nice addition, much as /tell works. The hotkey would contiue to select the NPC you were looking at, or talked to last. A tab channel could be created as well for NPCs, as it would make scrolling up to remember what the last NPC in a quest told you. RP-wise, this is a viable option and easy to learn. It does not interfere with talking to others in any way, nor does it have a time limit or focus issue.
**note: Options! Do not assume the system you chose is the right one just because you are the Developer. Give people options, and let them choose which system they like best in a checkbox advanced chat options menu. You allow people to assign keyboard controls, detail levels, label visibility, chat filters, character mesh/textures, and class, so why limit how they can speak with NPCs? The way to do this would have been to start integrating the new system in, and asking how folks liked it, not just putting it in and saying: "This is better." There is always room for options.
As for now, I take an option many others have taken to as well: I don't talk to NPCs at all. As I am a roleplayer interested on making the world inside the game the best it can be, this should have you worried.