Text boxes and conversations with NPCs

I can't really explain what I want to accomplish in words, so here's a visual aid:

<img src="http://i.imgur.com/7rCa7.png" border="0" />

I want the player to be able to talk to friendly NPCs but I cannot figure out how to do it. I've got the NPCs and I've got them to move around, and I've got everything for the player set, I just don't know why it's so hard for me to figure out how to make a text box come up, make it say some stuff, and then make it close. <img src="smileys/smiley7.gif" border="0" align="middle" />

I don't care what other people qualify a question to, either. If there's a question and I'm able to answer it, I will.

It isn't as easy as you might think, because you're working with a constantly ticking, parallel processing tool.

Here is just one example. Keep in mind, there are a couple of other ways to get to the same result, this is just the way I'd do it.

http://www.mediafire.com/file/jymdjj40y9893ui/npctalking.cap

(move with arrow keys, interact with space)