I think some of the awkwardness in the dialogue comes from just the formality of speech. Anakin has to call Obi-Wan "master" and has to address Padme as "m'lady" and "senator" due to his status. It's a sign of respect and as a padawan, he probably would've been whipped into properly addressing authority figures. I'm sure the dialogue (especially Padme's) would've sounded much more natural if her character used contractions, but they made a point of keeping the speech so damn formal. In many cases it's distracting and I know I don't like it, but Lucas probably felt this was important for whatever reason.

I can't say I have too much of a problem with the acting. I thought Portman was pretty bland in AOTC though I thought she did a great job in Episode I. I feel Christensen did an okay job with what he was given (his character is supposed to be whiny and arrogant as even stated in the films). The dialogue in the love story has lots of clunkers and I feel the restoration of the Padme's family scenes would have helped the love story feel more natural. I also think that it's better to have all the Anakin/Padme scenes in rather than cutting any (except for the ones where they visit the capital and the rolling in the grass). They really do feel like a natural progression. Without the family scenes, the love seems too sudden and without the others, (like it in the Magnoliafan edit) I don't think it goes anywhere.