Not a real NPC yet, but one of the things I'm playing with currently in the SLashup Space on Eduserv Island is a NPC driven by an external PandoraBot.
At the moment I'm trying to focus on making my NPC prim avatar look and feel roughly like a real avatar - i.e. shuffling its feet at regular intervals, blinking, and typing with its 'hands' while chatting. (For anyone that bothers visiting the SLashup Space, note that I haven't actually done any of this yet!)
Note that my prim avatar head is a sculptie that I stole from Chip Midnight.