Ended up with same problem.
This far, but no further:
http://imgur.com/pZvWN.jpgTalked with the very first two npcs, walked toward village, and get stuck every time I get close to the npc (Edward i think?) at the entrance to the village. Doesn't matter which direction I come from. Can't move in any direction. Just the camera, back and forth. It's like it's about to initate a cutscene, but doesn't get further than the "freeze-character-in-place" part :p
Making new char, or restarting game doesn't help. Worked fine yesterday, so have no clue what's up.
Edit: Oki, so... changed all graphics settings to the minimum, restarted game, and now the npc initiated dialogue normally. Changed graphics settings higher, to what they were before, and didn't bug out like before. So guess it fixed it somehow :x