Steam version here, and when I hit "woe to the vanquished" NPCs stopped having orange talk options, no talking. I skipped the quest and completed to flotsam (don't have to click talk to get there interestingly, all autodialog), then decided since I couldn't sell anything, to fix it. The fix is:
1.) Delete all witcher2 registry keys in local and current user
2.) Backup gamesaves into a different folder, then delete the witcher2 folder in my documents.
3.) delete and reinstall (annoying because I have to redownload which takes 7hrs)

I have verified that just deleting and reinstalling doesn't work, and just removing the registry keys and my documents folder then verifying local files (steam properties) doesn't work, I had to do both.

The problem is that only a few hours of gameplay later it has come back. I'm waiting on the 7hr download, but at this rate I'll spend more time downloading than playing it. I'll try the "backup" feature in steam this time and see if that helps. And maybe I can diff the two folders once it goes bad again to see which things are changing.

Only possible trigger I can guess at is that (I think) both times it happened I had just tried hitting escape to exit a conversation which takes you to the menu instead. Perhaps it doesn't like that.