On handling social situations:
Here's how I handle it, and it has worked pretty well. The player's actions (ie, the roleplay) determine what happens; the skill check determines the success of that action.
So for example, if the player wants to negotiate with the mayor, he doesn't just say "I negotiate with the mayor, my Diplomacy roll is 18. -- if he does, I ask "So what do you say?". We carry on a conversation for a while, and at a point I think is appropriate, I have the player make a diplomacy check, and the success/failure of the check determines the course of further roleplay.
That way, the player isn't penalized if he/she isn't particularly persuasive (and vice versa, the charismatic, intelligent player playing a character with Int and Cha of 8 has outcomes appropriate to the character's abilities), but the outcome is based on the character's skills (and ot the player's). It also forces RP -- if you don't RP it, it's not happening.
For exception RP, I'll award a bonus/penalty of +/-2 to the skill check -- over time, I've found this approach tends to encourage RPing to character abilities, without intimidating players because they're not as smart/wise/smooth as their character.
As to the PrC, I'd recommend looking at what the player wants, and having him explain what it is that the PrC offers that is critical to the character concept that isn't available in the mechanics you allow. Negotiate from there.