I always liked diplomacy [...]
Yes, I hope so! I said that some people might not like it because that "auto-win" button issue. Not that I agree with that point of view, but I understand why they have problems with it.
That's the reason, by the way, for what I believe some effort in the form of "skill trees" or "point distribution" is needed to achieve a good persuasion system.
Larian said that you will be able to avoid some combat by talking - but it will be impossible to avoid all combat because some enemies can't or won't talk to you.
I don't want that a persuasion system avoids all battles, but at least some of them. And not only battles... a good persuasion system should be implemented to obtain many different things ^_^