
Rand Linden has been adding information about the Pathfinding API to the SL Wiki. Also, a beta testing page is up in the wiki too. The testing page is incomplete. But, it is looking like we will soon see the new feature arriving in the Preview Grid ADITI.
What It Does
Non-Player Characters (NPC) or Non-Played Character, depending on who one talks to, is what we often call bots. A computer runs them. The SL Wiki has a page on the software that runs bots. See: Second Life Bot Software Comparison.
In addition to the more familiar bots we can have other NPC’s. The Linden Scripting Language (LSL) has a function named llCreateCharacter() that can turn any collection of prims, sculpties, and/or mesh into a NPC. The function is described as: Converts the current linkset to an AI [artificial intelligence] character. By default, the character’s shape will be an upright capsule approximately the size of the linkset, adjustable via the options list. The linkset must use mesh accounting.

