Smalltalk provides adds to game lore and it is a means to acquire unique thingsrewards:
- Trade Agents
- Discounts for stations or traders
- Location and skill visibility for hirable, well-skilled NPCs Collecting Training Manuals
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Please follow the above links for details but in short:
- Trade Agents provide up-to-date information on trades at stations.
- Smalltalk discounts are different to other discounts so they are a stackable, additional option.
- You can ask for info on the better-skilled NPCs in the area.
- Virtual Seminars allow you to train one of your NPC's skills (addition of a star).
Note: While setting up your trade agent network it will be useful to at least scan the Administration dock of every station. This will enable you to target a dock with a guaranteed Engineer if you need one for emergency Skunk repairs in the future!
While <player> is docked on stations, NPCs will occasionally start talking, and when they do a speech bubble appears over their head to help us identify them in a crowd.
This is our the cue to undertake an optional minigame if we wish. There are quite a few conversation topics, from the mundane (eg chatting about holodancers) to the serious (eg concerns about messing with AI). Since they add colour to the game world, they can be interesting; unfortunately the discussions cannot be sped up or skipped and there are only a finite number, so in the end it is possible to get frustrated by them. This is where the 'Borderless Windowed mode' comes in handy as Alt+Tab to (eg) a website cuts the audio but lets you see how things progress, if you keep the website window clear of the subtitles. Similarly, while hunting for Smalltalk, you you can do the same thing to pass the time while waiting for someone to start speaking. That's what I do anyway 
Finding smalltalk
Since As the chance of an NPC talking is random and not all NPCs will necessarily be the kind you would like to talk to, it is sensible to find a spot with lots of NPCs to increase the chance of a useful one talking early. Smalltalk is available only once per NPC; if you enter smalltalk then win, lose or cancel the 'talk, that NPC will not proffer smalltalk again until you leave the zone
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- Bunk rooms on all docks tend to hold up to ~8 NPCs so smalltalk normally starts within 10-20 seconds.
- Generally, Administration platforms house permanent unhirable station crew, which can help when recruiting Trade Agents.
- A handy place is the Engineering platform as groups of NPCs tend to be right at the docking platform, although there tend to be fewer NPCs per dock
- In Albion or DeVries a good spot is the Trade platform since groups can may hang around at the end of the first corridor.
- In Fields Of Opportunity|Verdant Profit|TU Overwatch, there are normally many Teladi in the main , central docking area.
If you 'encourage' an NPC trader by selling something to them, or preferably buying something from them, the chance of them smalltalking appears to increase slightly. So hunt out those junk dealers & buy scrap metal from them personally if you're after a decent ship crew! Simply talking to an NPC can increase the chance of smalltalk happening, even if you only ask the way to another NPC.
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- Ask for: Discount... (If NPC is a Trader they will offer a Personal discount for their wares (eg marines or rough gemstones) as well as a Station discount option (these are mutually exclusive); for all other NPCs the discount will apply to the (docked) station only - see below).
- -not used-
- Ask about: Job Applicant (offers the location and skills of a different NPC available to hire by <player> on the current dock). If no other hirable NPC exists this option will be unavailable
- Trade Updates (see below as not all NPCs offer it); they unlock continuous, real-time market info for the NPC's station. This is does not have the same effect as posession of Trading Computer sofware.
- Give: Item... (give a craftable gift that unlocks level 2 of smalltalk).
- -not used-
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- Ask for: Discount... (a higher-quality version of the discount available at level 1 above)
- -not used-
- Ask about: Job Applicant (different to level 1 and 3 smalltalks, so perhaps the range setting is station or possibly a higher-lvl NPC will be offered? - needs checking)
- -not used-
- Continue: Smalltalk (hard) (successful completion of a second smalltalk (quicker reactions needed) unlocks unlocks level 3 of (unlocks L3 smalltalk)
- -not used-
Level 3 smalltalk** (only available via level 2 smalltalk option 5)
- Extended Discount. (lasts a long time; probably the same numerical discount as level 2)
- -not used-
- Best Job Applicant (offers the location and skills of an NPC of a chosen type with the best, previously unknown skills, in the Zone)
- Ask for: Employee training (a semi-predictable source of Virtual Seminars - see below)
- -not used-
- -not used-
* A score of 7+ or more across 2 or 3 minigames. 8+ is required across the first 2 minigames to access L2 smalltalk (if you require 3 games the L2 'Give..' option is disabled))
** A score of 4+ for each of 3 minigames.
Trade Agents
These will only be offered by a subset of NPCs.
NPCs that can offer Trade Updates:
Inventory item traders (eg Food Merchant, Arms Dealer, Recruitment Officer or Black Marketeer).
License broker
Mechanic
Police Chief
Ship Dealer (unconfirmed)
Specialist
Non-hirable station crew (they are working on the station) - typically found on Administration platforms (ie Defense Officer, Engineer, Manager).
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Discounts for stations or traders
A smalltalking NPC can offer a discount at their station, which offers higher profit margins if taken advantage of.
After successfully smalltalking an NPC Trader (e.g. Black Marketeer, Arms Dealer or Mechanic; Recruitment Officers too), they may offer a choice of station or personal discounts. Station discounts from smalltalk apply on top of any other discounts, such as via Standings (Reputation) or those found outside stations while flying around near the station. Therefore they can all be stacked up to gain a higher profit margin than would otherwise be available.
Station discounts do not apply to shipyards as they don't produce anything other than ships. However they do apply to any other station's products. Shipyards will only usefully provide comissions (ie 'sell us that <ware>' at a bonus rate, rather than 'buy this <ware> from me' at a discount)
Solomon Short wrote:
"The Station discounts/commissions apply to all relevant trades with that station for duration.
You can also keep wandering around (&/or visit other docks on the station) to find more opportunities to unlock them, stacking them up.
So if you pick which stations you seek them on (I believe they're usually for station the NPC you game with is on) you can hope to apply them to expensive wares (which can be handy when you've got discounts on station building supplies)."
Location and skill visibility for hirable, well-skilled NPCs
These options only point to NPCs with unknown skills, so there could be other NPCs available to hire within range that won't be highlighted if their skills are already known. It makes sense to use these options where there are a lot of NPCs of the type you are interested in (e.g. see sidebar for zone-wide, or station dock menu to check platforms or station population).
Personally, I don't think the time involved in finding skilled employees via smalltalk is particularly worthwhile once we start to have more than a few ships or stations, but it's a mechanic available to us and different people enjoy different things. If I want to find well-skilled NPCs in a vanilla game after gaining some wealth, I tend to just mass-hire random NPCs and put them to work to see their skills that way (firing them if bad). More expensive hires are usually better skilled, but be aware that their cost is based upon their /total/ skill list, not simply the primary skills for their job.. so you could end up with a Captain who is rotten in Navigation and Leadership but excellent in Science & Management.. 
Collecting Virtual Seminars
Completion of the second smalltalk allows us to ask for 'Virtual Seminars', which are easiest to come by via Smalltalk (they're now (v4) occasionally available via mission rewards or yellow lockboxes too). They are available for various potentially important skills, such as Engineering, Leadership and Morale: a Seminar can be used to add one star to the related skill of any one of your hired NPC's primary, bold-highlighted skills (eg only Engineering for Engineers, but Leadership or Navigation for a Captain), to a maximum of 5 stars. Exactly which Seminar you may be offered relates to the primary skills or the type of the NPC in question so it is somewhat random, in the sense that it is random as to which NPC may begin a smalltalk. Boarding experience for Marine Officers can only be gained through.. heh.. experience, and it's slow (around +(2d6+2)% per successful boarding), so be warned!
These seminars are only available via the Give (craftable) Gift option, after the first smalltalk was completed with a score of 8+ points in 2 minigames and if the second smalltalk was completed with a score of 4+ points in all 3 minigames. A higher (maximum?) score in the second minigame stage can increase the range of seminars, depending upon the smalltalked NPC's class. <Player> can only pick 1 seminar as the prize, no matter how good the score.all 3 minigames.