Without some form of hardcore mod or some serious KSE/ ~cheatconsole activity, Sion should not be difficult to deal with. If you have not installed a hardcore and have not pumped up you P.C. to somebody that usually wears a blue suit with red boots and cape, then I can only say that a) your difficulty is set to hard, and the game is having a hard day or b) you have a bad install going on.
The T3 issue Ztalker mentioned was due to cheating up the P.C. Your Sion issue sounds very similar.
Assuming that everything is kosher, my strategy for fighting Sion in that encounter is exactly the same as the Davik/Calo encounter from K1 - attack the hirelings, not the boss. If you kill Sion's little assassin buddies (who are just normal assassins, easy to kill) FIRST, ignoring Sion, they die quickly and the cutscene advances (the game sees no point in watching you and Sion dance). Kill the assassins and you win.
RE: Nar Shadaa... there is no response for you to make to Atton. He tells you what is going on, and that's it.
Last edited by Qui-Gon Glenn; 10-19-2009 at 08:45 PM.
Reason: forgot to answer both questions