I've given BG1:EE another spin but I'm severely bothered by the lack of dialogue between characters. Nobody ever said a word. BG2 classic was full of dialogue. This has nothing. What's weird though is that the wiki mentions a lot of character interaction like this: http://baldursgate.wikia.com/wiki/Faldorn

Is it referring to a mod of some kind or is my version somehow bugged?

Unlike BG2, there's hardly any dialogue and interjections in BG1, but characters will only make comments like Khalid's "do you have to be so evil?" to Monty and/or Xzar.

If you want it to be more like BG2 you'll need BG1 NPC Project, which also adds some quests and encounters.
It's a bit variable in quality. My favourites are Monty&Xzar. Jaheira and Kivan also has lots of added content, but Kivan's whining gets on the nerves.

A lot of that stuff on the wiki is extra fluff written by the lore fans of the game, and they're building on a few lines of text to give it more flavor. BG2 definitely has more character interaction (it was kinda novelty-ish at the time), though BG1 seemed to have quite a bit when it first came out.

Especially since you can romance characters... Big jump... Sad that modern CRPGs (Obsidian!) don't have that. Some people hate this, but you get to learn things about characters that they otherwise wouldn't have revealed to someone who they weren't as close to.