I'm very optimistic about the Witcher 2 and can't wait for my collector's edition to arrive, but...
This video is just boasting. I've heard this hundreds of times before. In the end, all this is is randomised scripts and sound bytes. Which pretty much means that at some point, you'll hear those characters repeating themselves and the illusion o a "living" world will shatter like glass.
Haven't seen a single game which did it right, and I don't think it can be done without recording and programming hours of content.