Except, the human brain only uses what? 20% of the brain? If the brain were to reach a percentage of use, it may be able to more proficiently run variables and scenarios, while keeping repetition at a minimal. Further more, a conversation can consist of any word that the brain retains, so conversation could be projected by the brain using either the millions of words known to man, or through a past memory. Another point, the brain creates. This could all be like a video game, and everything said and done is simply another part of the "game". Everyone around the real intelligence are the AI, while the environment is simply created as easy as GTA's San Andreas was.